Sprout Mortgage

Court filing reveals millions diverted to Strauss and family, trustee pursues legal action to prevent further misappropriation.

As legal complexities intensify following Sprout Mortgage's shutdown, a U.S. Bankruptcy Judge intervenes, halting settlement funds and escalating legal actions against former executives.

Creditors seek $1.35M from Sprout by filing Chapter 7 petition in New York court.

Deal would compensate former employees left unpaid when lender abruptly closed July 6.

Michael Strauss and his new company requested an administrative hearing, keeping his license active for now.

Shea Pallante, who told Sprout employees the company was closing via a conference call last July, is Arc's new chief production officer.