At least his creditors can’t take away his nickname: Nails.
Lenny Dykstra, once at the pinnacle of the baseball world, is bankrupt and living in his offices.
His mansion, once owned by NHL great Wayne Gretzky, is now underwater. Literally. After depreciating in value over the years, Dykstra was forced to abandon it, leaving it in a state of utter ruin.
After baseball, Dykstra owned a successful chain of car washes which he sold and then parlayed the earnings into his next venture: The Players Club. The elitist magazine was a failure and Dykstra’s ambitions to turn it into a financial advisory service sputtered and faltered.
So what’s up with Nails? Where did his money go? Time to find out.
First, a little background on Lenny. Dykstra was a huge baseball star in the 1980s, playing for both the Mets and Phillies with great fanfare. After a 1991 drunk driving incident and several other injuries, he retired from baseball in 1996. Afterwords, he started a successful car wash business and became heavily focused on trading stocks.
Dykstra started an upscale magazine/concierge service targeted at professional athletes called The Players Club. The venture was a failure and wiped out a lot of Dykstra's finances, paving the way for his downfall.
Dykstra was known for being a total hardass both on and off the field. Drunk driving, fights, and a glory-for-all approach to the game made him a hit with fans. Business partners and spouses are not happy, however. Many have accused him of fraud and his wife Terri divorced him in April of 2009.
In 1991, Dykstra attended the bachelor party of Phillies teammate John Kruk and left around 1AM while still intoxicated. He then proceeded to crash his red SL 500 Mercedes into a tree, injuring both himself and teammate Darren Daulton very seriously.
When police tested his blood alcohol level, Dykstra came in at 0.179.
Perhaps best summed up in a GQ article entitled 'You Think Your Job Sucks? Try Working for Lenny Dykstra,' The Players Club was a poorly managed attempt to market a magazine, charter jet service, and brokerage/investment service all in one package. The target audience? Professional athletes like Dykstra.
Unfortunately for Dykstra, nobody wanted his services and the entire soon folded. For the full story from a former employee of his, read the GQ article.
Kevin Coughlin details many a nightmare scenario that he experienced working with Lenny.
Dykstra used to be a wise investor. He was big on stock and options trading at Big Ram Capital and other firms and was even praised by CNBC's Jim Cramer. Lenny also invested in those stores where you bring your crap in and they sell it on eBay for a fee.
Then his portfolio tanked and Dykstra was vilified in the press.
That's right. The Great One sold his fabulous Los Angeles mansion to Dykstra for a cool $17.5 million. Dykstra then proceeded to put it in the market when filing for bankruptcy, asking $24.5 million for it.
He never sold it. And even worse, it's now underwater and its value has plummeted to around $11.5 million.
Image: Inside SoCal
Dykstra's business partner, Lindsay Jones, sued him for fraud related to their car wash business. Says ESPN of the matter:
In the lawsuit, Jones alleges Dykstra advised him to gamble an average of $2,000 per game on select Phillies contests in 1993.
In a sworn statement, Jones said his baseball wagers were a form of payment to him, made 'on the basis that Lenny would cover all losses, and I would use the winnings to live on.'
A lame lawsuit, but nonetheless, it certainly didn't help Dykstra's public image. That and the lawsuit alleged that Lenny juiced up on steroids during his baseball career, something of a norm in today's world of sports.
Last July, Dykstra filed for Chapter 11 bankruptcy and was deemed unfit to re-tailor his financial situation.
The list of his creditors is truly obscene and considering how much money he owes, one doubts his ability to build himself back up.
Here's just the tip of the iceberg:
- $12.9 million, unsecured, to Washington Mutual (now part of JPMorgan Chase & Co.)
- $4.2 million, unsecured, to Bank of America's Countrywide and credit card units
- $3.5 million to Rockbridge Bank, Atlanta, Ga.
- $2.5 million to David and Teresa Litt, real estate pros in Calabasas, Calif.
- $1.5 million to K & L Gates LLP, a Santa Monica law firm
- $1.1 million to United Commercial Bank, San Francisco
- $962,000 to private-jet companies in New York, Cleveland and California
- $512,000 to the California state labour department's enforcement unit
The infamous 2007 Mitchell Report was a blow to professional baseball. It uncovered the wide abuse of steroids and performance enhancing drugs being used in the MLB. Dykstra was named in it and many former ball players have attested to seeing him use said drugs.
Just when you thought it couldn't get any worse, Lenny Dykstra was arrested by the LAPD for bankruptcy fraud on April 14, 2011.
He was first arrested on April 14th for grand theft, after purchasing vehicles through 'fraudulent means.'
Then it became known that Dykstra was selling items from his home that had already been repossessed by the bank.
He's also accused of selling or destroying about $400,00 worth property from house, including a $50,000 granite sink that he ripped out and installed in his new office.
He's being held on $500K bail.
Business Insider Emails & Alerts
Site highlights each day to your inbox.