Sprout execs could be spared in messy Sprout fallout

Former executives of failed lender Sprout Mortgage could be off the hook in a long-running lawsuit from laid-off employees seeking millions of dollars in backpay.

The non-qualified mortgage lender abruptly shuttered in July 2022 and allegedly left hundreds of employees without their final two paychecks. Sprout Mortgage was one of several industry players to fold that year when rising mortgage rates effectively ended the refinance boom.

Over 100 fired workers sued the company and its leadership that summer, and the case has taken many twists and turns since, including a short-lived settlement agreement. A federal judge last week recommended three ex-lieutenants be dismissed from the complaint, suggesting plaintiffs have failed to clarify the accusations against those former bosses.

The…