Krasnoff Domestic Growth Fund - Chapter 11 Case Summary

Business Description

Headquartered at 12 S. Main Street, #4, Pennington, NJ 08534, Krasnoff Domestic Growth Fund, LP ("KDGF" or the "Fund") is a Delaware limited partnership and hedge fund founded by Peter Krasnoff ("Krasnoff") in 2001. Krasnoff Capital Management, LLC ("KCM" or the "General Partner," and together with KDGF, the "Debtors") is the Fund's general partner.

• The Fund focuses on U.S. equities, bonds and money market instruments.
• The Fund has an investor base of approximately 20 investors, including certain holders with stakes exceeding 5% and 10%.
• As described to investors by Krasnoff over the years in investor communication materials, the objective of investment in the Fund was to outperform the benchmark of either the Vanguard Balanced Fund Index or the S&P 500 with "less risk" through diversification.
• The last four digits of the Debtors' federal tax identification numbers are Krasnoff Domestic Growth Fund, LP (1876) and Krasnoff Capital Management, LLC (1869).

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Corporate History

Governance Structure

Pursuant to its limited partnership agreement, the General Partner manages the operations and policies of the Fund. The Fund's investors hold limited partnership interests and do not participate in management, and the Fund holds the capital contributions of those investors.

• Pursuant to the operating agreement of the General Partner, the operations of the General Partner—including responsibility for all investment decisions and day-to-day affairs—are managed by a "Manager."

Management Succession

• Krasnoff served as the initial Manager of the General Partner, exercising full control over the General Partner and its operational and recordkeeping functions until his death in July 2025.
• On Sept. 16, 2025, members of the General Partner appointed Kevin Cyrana ("Cyrana") as Manager.
  • Per the Declaration, the resolution appointing Cyrana was signed by all members holding voting interests, thereby providing the consent required to appoint him under the Limited Liability Company Agreement of KCM.
• On July 7, 2026, Cyrana was removed as Manager and the members of the General Partner appointed Jacen Dinoff ("Dinoff") as Manager. Dinoff had no connections with the Debtors, Krasnoff, or Cyrana prior to his appointment.

Restructuring Advisors

• In March 2026, KDGF and KCM engaged Reflect Advisors, LLC ("Reflect") to provide restructuring and financial advisory services and appointed Adam Zalev as CRO on or about April 23, 2026.
  • Cyrana, at the time Manager of the General Partner, signed the engagement letter setting forth the terms of Zalev's retention as CRO.
• Zalev is the Founder and Managing Director of Reflect, a boutique financial advisory and restructuring practice founded in 2023, whose professionals are engaged as advisors in numerous formal and informal restructurings. Prior to founding Reflect, Zalev served as a Senior Managing Director of FTI Consulting, Inc. ("FTI") for six years, and prior to joining FTI, held progressively more senior roles, culminating in Managing Director, at Alvarez & Marsal ULC for nine years.
• Mandelbaum Barrett PC (Jeffrey M. Rosenthal, Vincent J. Roldan and Katie F. Warren) serves as proposed counsel to the Debtors.

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Prepetition Obligations

The limited partners of the Fund are also the main creditors of the Fund. The Declaration does not identify any funded debt or secured obligations of the Debtors, and none of the First Day Motions described in the Declaration seeks debtor-in-possession financing.

• Based on available information, investors believed the Fund held approximately $22 million in capital as of Krasnoff's death in 2025.
• As of the Petition Date, Reflect has identified or located approximately $5.1 million in estate assets of the Debtors, reflecting the discrepancy Reflect identified during the wind-down process.

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Events Leading to Bankruptcy

Death of the Founder and Transition to Wind-Down

Following the death of Krasnoff in July 2025, the General Partner and the Fund substantially ceased normal operations and transitioned into a wind-down process.

• During the wind-down process, Reflect, as financial advisor engaged by KCM and KDGF, identified significant discrepancies between self-reported investor capital balances and assets of the estates located in known cash and brokerage accounts.

Chapter 11 Filing and Go-Forward Strategy

The Debtors filed these cases in the U.S. Bankruptcy Court for the District of New Jersey on July 31, 2026 (Case No. 26-18662 (CMG)), to further an orderly wind-down process.

• Under the direction of Dinoff, as Manager of the General Partner, the Debtors shall investigate assets of the Fund, prosecute appropriate avoidance actions, and distribute proceeds for the benefit of these investors.
• The Debtors filed various First Day Motions on the Petition Date to help ensure an efficient wind-down process. According to the CRO, the relief sought in each First Day Motion will enable the Debtors to efficiently wind down while in Chapter 11 while fulfilling their duties as debtors in possession, and is in the best interests of the Debtors, their estates, and their creditors. The motions are procedural and non-adversarial, and include:
  • Joint Administration Motion: Seeks joint administration for procedural purposes only, which the Debtors assert will provide significant administrative convenience without harming the substantive rights of any party in interest, with one file and one docket maintained for all the jointly administered cases under the case of Krasnoff Domestic Growth Fund, LP. Because many of the motions, hearings and orders in these Chapter 11 Cases will affect each Debtor entity, joint administration will allow the U.S. Trustee and all parties in interest to monitor the cases efficiently, as all filings will be available on one docket rather than across two dockets, and parties in interest will benefit from associated cost reductions.
  • Creditor Matrix Motion to Seal: Seeks authority to redact certain personally identifiable information for individuals within the creditor matrix for each Debtor (the "Creditor Matrices") per the order attached to the motion as Exhibit A, which the Debtors assert is necessary to protect the privacy interests of individuals who may be listed on the Creditor Matrix, the Schedules and Statements, and any other documents which may be filed.
  • Schedules Extension Motion: Seeks an order extending the deadline to file the Debtors' schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases and statements of financial affairs by 21 days, for a total of 35 days from the Petition Date, through and including Sept. 4, 2026. The Debtors submit that ample cause exists because preparation of the Schedules and Statements requires compilation of information from books, records and documents relating to claims, assets and contracts from each Debtor entity, and a significant expenditure of time and effort; preparation was not practicable prepetition given the Debtors' focus on preparing a smooth transition into Chapter 11 and the relatively recent appointment of Dinoff as Manager. The Debtors submit that the requested relief will not prejudice any party in interest.