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Sept. 4 (Bloomberg) -- Lenny Dykstra, who helped the New York Mets win the 1986 World Series, was accused of taking goods from his home including a $40,000 French stove two weeks before a bankruptcy judge appointed a trustee to oversee his finances.
Fixtures and furniture were “removed and presumably sold” by the former Major League Baseball All-Star, who filed for bankruptcy in July, according to court papers filed by the mortgage lender Index Investors LLC, a creditor in the case.
U.S. Bankruptcy Judge Geraldine Mund in Los Angeles said this week she will appoint a trustee who will assess prospects for Dykstra to lead a reorganization, said Bruce Speiser, a lawyer for Index Investors, which asked the court to let creditors liquidate the ballplayer’s assets instead.
A person in bankruptcy isn’t allowed to dispose of assets. Some do it anyway. Prosecutors of jailed con man Bernard Madoff, whose company is under trusteeship in U.S. Bankruptcy Court, said he mailed items including a diamond bracelet and watches to family in violation of a court-ordered asset freeze.
Dykstra was “apparently in the process of stripping furnishings, fixtures and equipment from the estate property,” Index Investors said in an Aug. 19 court memorandum, “doubtlessly to fuel his lifestyle at the expense of his creditors.”
Gretzky’s Old House
Wayne Gretzky, a Hall of Fame hockey player who’s now a coach and team part-owner, sold Dykstra the house in Thousand Oaks, California, for $17.4 million, Dykstra said in court papers. Gretzky bought the La Cornue range for $51,750 including tax and freight, Index Investors said in its court filing.
Jonathan Hayes, a lawyer for Dykstra, didn’t immediately return a call and e-mail seeking comment.
Dykstra told ESPN.com in April he was worth $60 million. His July bankruptcy petition listed debt of $10 million to $50 million. He owed JPMorgan Chase & Co. $12.9 million, according to the filing, and Bank of America Corp.’s Countrywide and credit-card units a combined $4.2 million.
Dykstra’s Aug. 10 court declaration said after the bankruptcy he was required by family law court to turn over his $5,700 monthly pension from Major League Baseball to his wife, Terri, who filed to dissolve the marriage. He has had no other income since the bankruptcy filing, his lawyer said in court papers.
Second House Has Mold
Dykstra’s 17,000 square-foot Thousand Oaks residence, which he valued at as much as $20 million in court papers, has three guest houses. JPMorgan has the first priority mortgage and Index Investors, which is owed $900,000, has the second and third- priority mortgages, he said.
Dykstra valued a second 8,000-square-foot house in Westlake Village, California, bought in 1999, at as much as $8 million even though it has a “water leak and mold caused by the leak,” he said. Countrywide has a $4 million first priority mortgage on it and a second lien is held by Wachovia Home Mortgage, he said.
He filed for bankruptcy to stop Index Investors from holding “a scheduled illegal foreclosure sale,” he said. The lender subsequently asked the court to let it start foreclosing, and to convert Dykstra’s Chapter 11 proceedings to a Chapter 7 liquidation.
Dykstra opposed the motion in court, saying he has tried to co-operate with the lender, to reinstitute his interrupted insurance on the house and find a buyer. The buyer “actually entered into a purchase agreement to buy it for $23 million” before withdrawing from the deal, he said.
Reclaim a Porsche
Porsche Financial Service Inc. asked this week for permission to reclaim a 2009 Porsche Cayenne S, a sport-utility vehicle.
Dykstra, 46, known as “Nails” by fans for his aggressive playing style, became an entrepreneur after injuries ended his career, opening a chain of car washes, a subscription Web site that offered stock picks and The Players Club.
The ballplayer owes almost $1 million to jet charter services, about $342,000 to the lawyer Daniel Petrocelli and $229,000 to the literary agent David Vigliano.
Dykstra broke into the major leagues in 1985 with the Mets and helped the team win a World Series title the following season.
He joined the Phillies in 1989, and four years later finished second to Barry Bonds in National League Most Valuable Player Award voting as he helped the franchise reach the World Series in 1993 to face the Toronto Blue Jays. Dykstra had a career .285 batting average with 81 home runs and 404 runs batted in.
The case is In re Lenny Kyle Dykstra, 09-18409, U.S. Bankruptcy Court, Central District of California.
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