Lenny Dykstra's Last At Bat?

"Where am I going to be in a year?" Lenny Dykstra told me in July of 2009. "Let's put it this way, I'm going to be living the dream."

Not quite.

Lenny Dykstra
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Lenny Dykstra

Dykstra will appear in a federal bankruptcy court Friday in Los Angeles, where he will probably witness the final resolution of his Chapter 7 bankruptcy.

If the proposed settlement is approved, it's quite possible that the baseball legend will walk away with nothing.

When we first spoke last year, Dykstra had just filed Chapter 11 to stop the foreclosure of his country club mansion, bought from Wayne Gretzky in 2007 for $17.5 million.

Dykstra claimed to be the victim of mortgage fraud by Washington Mutual, which was later taken over the JP Morgan Chase . He vowed to sue. He also promised the bankruptcy filing was only a temporary setback, buying him time to reorganize. "Anybody that's owed any money by me will get paid, ok?"

Not quite.

Over the last year, I've followed Dykstra's story as the Chapter 11 reorganization became a Chapter 7 liquidation, and the court took the estate away from Dykstra and gave it to a trustee. I posted video of the mansionafter Dykstra tore up parts of the house to try to prove he needed $10 million to repair water damage. And I blogged about the auction of his World Series ring and trophy by a Beverly Hills pawn shop.

Along the way Dykstra told the judge he was "living on the streets" (and then told a CNBC producer that he wasn't), he was accused by the trustee of taking property from his home and hiding it, and

a new book says Dykstra admitted to using steroids

during his baseball career and also took money to pitch a stock.

He even relaunched an online investment newsletter, and we reported that, too.

Dykstra made good on his threat to sue Chase for mortgage fraud, but the suit was dropped. The bankruptcy judge writes, "The trustee advised me that this case was voluntarily dismissed by Mr. Dykstra's attorney since it was filed without the consent of the trustee and the attorney was not authorized to do so by this court."

Today, the house Dykstra bought for $17.5 million is on the market for $10 million.

It is the most famous house inside Sherwood Country Club, sitting atop a hill they used to call "Wayne's World" when Gretzky lived there.

"Where am I going to be in a year? Let's put it this way, I'm going to be living the dream."" -Former MLB Player, Lenny Dykstra

Chase claims it's owed $13 million on the first mortgage, while a second lienholder claims he's owed nearly $900,000. The proposed settlement for Dykstra's estate will have JP Morgan paying the estate $400,000 to resolve all claims and get the house. The trustee will give the bank $92,000 in insurance money to fix repairs, which apparently did not cost the $10 million Dykstra claimed. The second lienholder may end up with nothing. Same with Lenny Dykstra, but at today's hearing, he gets one last at bat.

"Mr. Dykstra wishes to present the testimony of an economist that his damages exceeded the amount of the JP Morgan claim," writes the judge, "and thus the right to recoupment is far in excess of the settlement agreement."

Another player in this drama will be Dykstra's ex-wife, Terri, who may also end up with nothing, though she is reportedly receiving her ex-husband's major league baseball pension.

In an email to me Thursday night, Dykstra said he believes the trustee will be removed from his case and that he, Lenny Dykstra, will still prevail. Even at this late date, even as it seems the game is over, in Lenny Dykstra's mind, it's only the bottom of the ninth with a full count, and he still has a shot at winning.

UPDATE: I have just learned from attorneys that the trustee in this case resigned yesterday afternoon. This surprise last minute turn of events could delay a resolution of the bankruptcy. What's more, the attorney for the second lienholder says Dykstra has moved back into the mansion and won't let brokers show the home. I will update later with more.

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