Ex-baseball star and bankrupt financial ‘guru’ Dykstra envisions a comeback
Lenny Dykstra paced his Westwood apartment, fidgeting with a butterfly knife and mumbling profanities to an attorney. A succession of visitors, including a hulking bodyguard and a personal assistant named Destiny, streamed through the 12th-story penthouse.
One wall held a framed poster from Dykstra’s days with the Philadelphia Phillies, his cheeks characteristically bulging with tobacco chaw. Against another wall leaned a Sotheby’s real estate sign, sullied with specks of fresh dirt.
Dykstra, nicknamed " Nails” by baseball fans for his tough style of play, said he uprooted the for-sale sign from the front lawn of his Thousand Oaks mansion. It had been staked there at the direction of court officials overseeing his bankruptcy case. Then, Dykstra said, he changed the locks to the neo-Georgian home and threw a victory party there to celebrate what he saw as his reclamation of the $17.4-million showplace, bought from hockey star Wayne Gretzky in 2007, at the top of the housing bubble.
“If you [mess] with Nails,” Dykstra said, nodding at the sign, knife still in hand, “you get the hammer.”
Dykstra, a self-styled financial guru who sells his investing expertise through a website and occasional TV commercials, charmed Wall Street and the sports world with his stock-picking columns and fast-spending life after baseball.
But by 2009, most of the money was gone, and the three-time major league all-star filed for bankruptcy protection, saying he wanted to stave off foreclosure and reorganize his finances. Instead, Dykstra’s creditors quickly pushed him into a court-ordered liquidation.
At age 47, the Nails who posed bare-chested for an ‘80s-era New York Mets glamour poster has turned beefy and grizzled. He has a thatch of graying hair and is missing several teeth. His marriage has crumbled. His baseball pals have made themselves scarce. The bejeweled 1986 World Series ring was pawned, then sold.
Still, like those days on the diamond, Dykstra has proved he’s not going down without a fight. He has challenged the bankruptcy proceedings at nearly every juncture and has managed to keep creditors away for months. At times representing himself, Dykstra argues that he could right his finances if he were allowed to pursue lawsuits against various parties.
Court officials, creditors and former associates say the ex-ballplayer is in over his head and should submit to the unwinding of his once-gilded existence.
“It’s a slow-motion car wreck,” said author Randall Lane, who devoted a chapter to Dykstra in his recently published book about Wall Street excess, “The Zeroes: My Misadventures in the Decade Wall Street Went Insane.” “He is a perfect metaphor for what happened to many people, but he did it on a scale that was monumental.”
Dykstra’s bankruptcy filing lists assets of $24.6 million and debts of $37.1 million. Unsecured creditors, which number close to 100, offer a snapshot of his former life as a high roller: credit card companies, the Carlyle hotel in New York, Mercedes-Benz Financial, the venerable Rubenstein public relations firm and several former employees, including the pilots of his private jet.
The Gretzky mansion is by far the most valuable and hotly contested piece. Claimants include Wall Street titan JP Morgan Chase & Co. and private equity firm Index Investors.
Dykstra currently lives in a two-bedroom bachelor pad in the Westwood high-rise, where, according to court documents, he has missed several months of rent. He is also fighting eviction attempts by Wells Fargo, which foreclosed on the property’s owners.
The apartment is filled with remnants of his flush days, including flat-screen televisions, sports memorabilia and ornate office furniture. Photographs of his three sons — his middle son, Cutter, is a minor league baseball player — are scattered throughout the place. His desk displays a framed photo of Dykstra with President George H.W. Bush smiling on a sunny golf course.
When not in court, the retired center fielder spends most of his time in his living room staring at two flat-screen computer monitors, firing off e-mails to people involved in his case, plotting a financial comeback and chugging Red Bull energy drinks.
Dykstra said he moved into the apartment last winter after living for months in various odd spots including an airplane hangar and his car after the mansion was placed under control of the court. His attempt to retake the Thousand Oaks property this summer was short-lived, and the court has barred him from returning there.
“I was a wanderer, dude. I was like Gandhi,” Dykstra said. “He lived out of a bag.”
Dykstra, who grew up in Garden Grove, helped the Mets to a 98-win season in his first year in the majors, 1985, and he became a star the next year, helping them win the World Series.
Dykstra cemented himself in the hearts of his fans with his grit, determination and raucous style of play. In Michael M. Lewis’ book “Moneyball: The Art of Winning an Unfair Game,” Oakland Athletics General Manager Billy Beane, a former Mets teammate of Dykstra, described him as “able to instantly forget any failure and draw strength from every success.”
Dykstra was traded in 1989 to Philadelphia, where the rest of his career was marked by successes as well as injuries, brawls and allegations of steroid use that he has denied. Dykstra’s last great season was in 1993, when he set a major league record of 773 plate appearances and led the National League in at-bats, walks, hits and runs — a staggering performance that helped lead the Phillies to the World Series, which they lost to the Toronto Blue Jays.
That year, Dykstra started a luxury car wash in Corona that he dubbed “the Taj Mahal” of car washes. He expanded the business to other parts of Southern California and in 2007 sold it to investors. By the time he retired in 1998, Dykstra had earned $36.5 million from major league baseball, according to Baseball-Reference.com.
In the go-go years of the new century, Dykstra brought his head-first style to Wall Street. After teaching himself financial analysis, he struck up a friendship with CNBC “Mad Money” host Jim Cramer, who hired Dykstra to write a stock-picking column for his influential website, TheStreet.com.
With his sports celebrity, entrepreneurial success, unlikely reincarnation as an ace stock picker and Cramer’s seal of approval, Dykstra’s prominence soared. He was profiled in a New Yorker article titled “Nails Never Fails: Baseball’s most improbable post-career success story.” He touted his stock picks on financial news shows.
He also donned the trappings of Wall Street success: He drove a Maybach, flew by private jet and lived in the palatial former Gretzky estate, a mansion of more than 10,000 square feet with tennis courts, a pool, a guesthouse and striking views of the Sherwood Country Club.
In 2008, he began publishing the Players Club, a glossy financial advice magazine created exclusively for pro athletes featuring sports luminaries such as Brett Favre and Tiger Woods on its covers. Dykstra envisioned the Players Club becoming a company that would help players with all aspects of their retirements and dealings off the field.
The venture folded as lawsuits from creditors and unpaid business associates began piling up. Among the litigants was author Lane, the former owner of Doubledown Media, which produced the Players Club. Lane attributes the glossy’s failure in part to Dykstra’s unrestrained spending.
As an example, Lane cites a launch party for the Players Club that turned into a $600,000 affair at the Mandarin Oriental ballroom in New York attended by former tennis star John McEnroe, Donald Trump, Cramer and other elites of the business and sports worlds.
Cramer, who refused an interview request for this story, issued a statement standing up for his former protege.
“Lenny was a good investment idea generator and strong contributor for a period of time,” the statement said. “I am personally surprised and saddened by the events that today pervade Lenny’s life.”
Dykstra’s undoing is outlined in voluminous court filings. His main source of income in 2007 was $125,000 in monthly payments from a type of IOU called a promissory note, which Dykstra had received from the buyers of his car wash businesses.
The purchase of the Gretzky home that year would prove financially catastrophic, as Dykstra took on monthly payments totaling $135,434. The Washington Mutual broker who had arranged the loans for the purchase — promising a quick refinance into a cheaper mortgage once the deal closed — never followed through, according to a declaration by Dykstra in bankruptcy court documents. The former ballplayer said the loan was predatory.
Property values in Southern California began to plunge, sending Dykstra into a scramble that led to the sale of his nest egg: the car wash note. By the time Dykstra filed for bankruptcy in July 2009, he had six loans totaling $21 million secured against the mansion and another nearby home. His only listed income was a $5,700 monthly pension from Major League Baseball.
Despite this very public collapse, Dykstra appears to have no shortage of associates and hirelings willing to work for him these days. He has several projects planned, including the reintroduction of his Players Club magazine.
Certain that he will win back the Gretzky home, Dykstra is making plans. With a sharply dressed accountant at his side, he said he wants to carve up the mansion among several investors as a time share.
“I have been fighting my whole life,” Dykstra said. “That’s why I have a new theme song, dude, and I am going to play it for you.”
“I want to be a billionaire, so … bad, buy all of the things I never had,” he sang along, loudly and off-key, to the Travie McCoy song “Billionaire,” as it blared from his Bose computer speakers. “I want to be on the cover of Forbes magazine, smiling next to Oprah and the queen.”