Orlando City are set to take legal action against Sao Paulo following the failed transfer of Paulo Henrique Ganso.

Orlando released a statement on Thursday announcing they had withdrawn their bid for Ganso and will now sue Sao Paulo in order to recoup an estimated $5million lost payments and interest from their loan of Kaka to the Brazilian club last year.

The Major League Soccer club had offered Sao Paulo a compromise that would have seen Ganso join Orlando in return for the cancellation of Sao Paulo's debt and an additional $900,000-plus in transfer fees.

However, this now appears unlikely following the release of the following statement by Orlando City SC:

"Orlando City Soccer Club closes negotiations for Paulo Henrique Ganso due to lack of response from São Paulo FC by the specified deadline," the statement read.

"The Club will pursue a collection lawsuit for the non-payment of all the commitments owed by São Paulo FC as part of the loan deal of the player Kaká. No further comments will be issued on this matter."