Lenny Dykstra files 'difficult, necessary' bankruptcy

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"In the end, the restructuring will definitely be a good thing," Lenny Dykstra says of his bankruptcy filing. (Frank Franklin II/AP)

UPDATED: Phillie-turned-would-be stock-option guru Lenny Dykstra owes more than $10 million to JPMorgan Chase, Bank of America and other creditors, and owns less than $50,000 to pay them with, his Los Angeles bankruptcy filing says. NEW: Read Dykstra's bankruptcy filing

"Sometimes the difficult decisions in life are the most necessary," Dykstra wrote me in an email. "In the end, the restructuring will definitely be a good thing." Yes, he's filed for voluntary Chapter 11.

A good thing, for whom? Dykstra owes, among others:
$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 labor department's enforcement unit

And hundreds of thousands more, each, to celebrity lawyer Daniel Petrocelli, New York literary agent David Vigliano, California anaesthesiologist Dr. Festus Dada, former publisher Doubledown Media, Index Investors, Wachovia Securities, and more. And smaller amounts to New York's Carlyle and Jumeirah Essex hotels, Verizon, UPS, AmEx, Citibank, and other private-jet companies. Tho nobody in Philly.

Just last week, Dykstra was still soliciting $995/year subscriptions to his newsletter at www.nailsinvestments.com, after his column was dropped by Jim Cramer's TheStreet.com. "Nails" claimed he had a record of better than 100-0 in stock options calls. Tho he ignored my request to prove it. Readers who complained about his claims said such results would only be possible, and still not much, if he'd kept counting performance until the blue-chip stocks he mostly bet on finally rose, instead of admitting defeat when his contracts expired underwater. Like the stopped clock that's still right twice a day.

Which just raises the old question: If he's so smart, how come he's not rich?

ESPN report here.

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