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Bankruptcy Trustees Goes After Dykstra—And His Wife

Lenny Dykstra has long portrayed himself as the victim of fraud.

Now the Trustee of the U.S. Bankruptcy Court is accusing Dykstra of fraud.

David Gottlieb is the newly appointed Trustee overseeing the Chapter 7 dissolution of Lenny Dykstra's estate. He replaces the previous Trustee, who abruptly resigned this summer over conflicts purportedly involving the bank holding the note on Dykstra's country club mansion.

Lenny Dykstra
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Lenny Dykstra

Gottlieb has filed a complaint with the bankruptcy court against Dykstra, his wife, Terri, along with Dorothy Van Kalsbeek, Dykstra's long-time personal assistant, an individual named Peter Neil, and Public Storage.

Gottlieb believes the group has conspired to hide or sell potentially hundreds of thousands of dollars in personal property, including furniture, jewelry, and art, which rightfully belong to the estate and its creditors.

The Trustee is claiming that Dykstra has repeatedly "failed to adequately explain the location of certain personal property." For example, at one point Dykstra claimed that the son of a former maid had stolen "two big screen TVs, a pool table, watches and personal computers," but he never reported the theft and had no contact information for the maid or her son.

Much of the complaint is not new—that Dykstra allegedly removed personal items even after "giving his word" that he would not, or that he put some of those items on Ebay, or that he tore out tens of thousands of dollars of fixtures inside his hilltop home. The Trustee believes some missing items are in a Public Storage unit which may have been registered under another name, and since Public Storage may have taken possession of that property when the bill wasn't paid, the company is named in the complaint.

This appears to be the first time Terri Dykstra has been a focus of a Trustee complaint. While Terri and Lenny Dykstra separated before he filed for bankruptcy, and he spoke caustically of her during much of 2009, the two appeared to be working together when last in court in August. Dykstra earlier claimed his estranged wife moved $540,000 worth of personal property out of the house before he filed for Chapter 11 (which was later converted to Chapter 7), and the Trustee claims Mrs. Dykstra has failed to give a full accounting of what she possesses and where it is.

All sides return to court next month. Dykstra is still betting he can make the case that, far from being a crook, he is a victim of mortgage fraud which led to his financial ruin. But if the Trustee can prove the former World Series champ willfully violated court rules, Dykstra could face bigger problems than being broke. He could face criminal prosecution.

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  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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