Nails Could Get Hammered
Investors want to get at Lenny Dykstra's personal assets
By PAT DOLENTE
Updated 10:01 PM EDT, Fri, Aug 7, 2009
Nails may be about to meet the hammer – the Judge’s hammer that is.
Former Phillie, Lenny Dykstra, who filed for bankruptcy last month, is now being accused of basically lying to one of his major creditors, reports Mike Fish of ESPN.
Nails received two loans from Index Investors totaling $770,000. Both loans were secured against his southern California home, once owned by hockey god Wayne Gretzky. As part of the deal, Dykstra had to show proof his home was insured. The company claims the policy he presented wasn't any good -- that Dykstra hadn't paid the premiums and his homeowners insurance had been canceled. Dykstra “engaged in fraudulent and deceitful acts” according to the motion filed by the company in bankruptcy court. Index Investors wants to force Dykstra to dip into his personal assets to pay them back and they want him bumped off as trustee.
Dykstra filed for Chapter 11 Bankruptcy, which allows a person or company to reorganize without having to liquidate or hand over all their assets, according to ESPN. Attorneys for Index Investors want his case changed from Chapter 11 to Chapter 7. That's a lot worse for Lenny because it could force him to liquidate all of his assets, including his home, to cover his debt, Fish reports.
An emergency hearing in U.S. Bankruptcy Court is set for Tuesday.
Index Investors attorneys described Dykstra as "an individual whose fortunes have soured, and whose abilities are suspect." They said his "post-petition conduct mirrors his pre-petition conduct [which has resulted in numerous lawsuits being filed against him]," according to Fish. The company says made it look like he was worth more than $58 million. Court documents show he has about $50,000 in assets and may owe up to $50 million.
If the judge rules against Dykstra, Nails could get hammered. Big time.
First Published: Aug 7, 2009 3:28 PM EDT
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