Our firm represents all plaintiffs in the case of Agudelo v. Recovco Mortgage Management LLC et al, 2:22-cv-04004-JMA-LGD. After almost four years of litigation, a thwarted settlement agreement, and research and bankruptcy filings showing that no active Defendant likely has assets of any value that Plaintiffs would be able to reach, we have regretfully concluded that there is no practical way to secure a recovery for the Plaintiffs in this case.  

 

Over the past several years, we have interviewed numerous former employees of Sprout and Recovco, conducted repeated and extensive online searches, and even hired a forensic accountant, all to identify assets that could possibly be reached to satisfy employees’ claims. However, each potential asset identified has ultimately turned out to be subject to liens and/or judgments that exceed their value. For example, Defendant Michael Strauss owned an over-7,000 square foot Park Avenue penthouse that was originally listed for sale at approximately $26 million. However, filings in the related bankruptcy case of In re Sprout Mortgage LLC, Chapter 11, Case No. 23-72433-reg, confirmed the penthouse was subject to liens held by creditors in an aggregate amount of roughly $18 million. On October 6, 2025, following foreclosure and a public auction, the property was sold for $625,000, leaving no surplus proceeds to pay any junior creditors or Strauss.

 

Following the shutdown, Recovco has never been found to have assets of any value, and the company’s previous counsel has reported that Recovco failed to pay them “since well before the bankruptcy proceeding was initiated in July 2023.”  Finally, the most recent available operating report filed by the bankruptcy trustee in In re Sprout indicates that Sprout’s assets are currently valued at negative $62,265,384. Needless to say, following completion of the bankruptcy proceedings against Sprout, there will be no assets left over to satisfy Plaintiffs’ claims in this case. 

 

We sincerely wish that there were a way to get all affected employees the financial recovery they deserve, but unfortunately there are no options for moving forward that are likely to produce that result. Therefore, we plan to move for voluntary dismissal of this action on or about June 26, 2026. If you would like to pursue your claims individually, you may do so by hiring your own counsel. Please notify us if you intend to do so, so that we can notify the Court. We wish everyone the best in their post-Sprout endeavors and we truly regret that a positive outcome for this case is not possible.