Lenny Dykstra dropped a $100 million predatory lending lawsuit against JP Morgan Chase & Co (NYSE: JPM) and the bank has come to an agreement with a bankruptcy trustee to allow it to foreclose on the home of the former baseball player’s California mansion, according to court filings.
Dykstra had accused Washington Mutual, now owned by JP Morgan Chase, of fraudulently inducing him to borrow more than he could afford to purchase his $17.4 million home from hockey legend Wayne Gretzky, only to renege on a promise to let him refinance.
The agreement between JP Morgan and the bankruptcy trustee calls for the bank to pay $400,000 to Dykstra’s estate and give up its interest in a possible $500,000 claim on an insurance settlement.
In exchange, the trustee agreed to let JPMorgan “proceed with its applicable remedies under state law to foreclose” on the six-bedroom, eight-bath home, and to pay the bank $92,000 from insurance proceeds to clean up the disheveled property.
“The trustee and the lender believe that any litigation concerning the loan and/or the property would likely be time-consuming, factually complex and expensive,” a lawyer for the trustee Arturo Cisneros wrote.
Court records show that JP Morgan Chase is owned at least $13 million U.S. on Dykstra’s mortgage. The home is currently for sale for $14.9 million.