HUNTINGTON, NY – The iconic Oheka Castle, one of Long Island’s most prestigious landmarks, has entered a new chapter in its long and storied history. The estate’s ownership filed for Chapter 11 bankruptcy protection last week, effectively halting an impending foreclosure sale and setting the stage for financial restructuring.
The bankruptcy filing, made by Gary Melius through his entity Kahn Property Owner LLC, comes amid mounting debt tied to a long-defaulted commercial mortgage loan. The move pauses legal efforts by a lender to seize control of the property and offers Melius an opportunity to reorganize finances while keeping the venue operational.
Financial Turmoil Behind the Castle Gates
According to court documents filed on July 31, the company currently holds approximately $63 million in liabilities while claiming assets worth around $93 million. The majority of those assets are tied to the 22-acre Huntington estate itself – home to one of the largest private residences in the United States.
At the center of the dispute is a $28 million commercial mortgage-backed security (CMBS) loan that Melius defaulted on more than a decade ago. With accumulated interest, penalties, and legal fees, the debt has ballooned to an estimated $50 million. That note is now held by a New York-based entity associated with Taconic Capital, which had scheduled a foreclosure sale prior to the bankruptcy filing.
The Chapter 11 filing automatically suspends that sale, giving Melius time to present a court-approved plan to pay creditors while maintaining business operations at the property.
Business Continues – For Now
Despite the bankruptcy, Oheka Castle remains open, and all scheduled events including weddings, private parties, hotel stays, and guided tours are proceeding as planned. Representatives from the estate emphasized that guests and clients will not experience any interruption in services, and that the bankruptcy process is focused solely on the business’s financial obligations, not its day-to-day operations.
The castle has long served as a hub for destination weddings, exclusive retreats, photo shoots, and film productions, with its grand halls and manicured gardens drawing both celebrities and tourists alike. Its historical charm and European-style architecture have made it a standout symbol of Long Island’s Gold Coast era.
A Historic Landmark with a Complicated Legacy
Built in the early 20th century by financier Otto Hermann Kahn, Oheka Castle is listed on the National Register of Historic Places and is regarded as one of the finest surviving estates from Long Island’s Gilded Age. Over the past several decades, Melius has invested heavily in restoring and operating the castle as a luxury venue.
But this isn’t the first time Oheka has faced financial headwinds. The estate has weathered decades of legal battles, renovations, business pivots, and even a 2014 attempted assassination of Gary Melius in the castle’s parking lot, a case that remains unsolved to this day.
Rezoning and Development on the Horizon?
Looking ahead, Melius has indicated that he intends to retain ownership of Oheka Castle and continue hosting events while exploring long-term rezoning options for the surrounding property. Previous plans have included luxury residential condominium development on unused portions of the estate – an idea that has generated both interest and opposition from local stakeholders.
Taconic Capital, now a major creditor in the case, also owns nearby land and may pursue adjacent real estate development, regardless of the outcome of the bankruptcy proceedings. Whether that development complements or competes with the castle’s historical preservation remains to be seen.
What It Means for Long Island
Oheka Castle’s legal and financial future remains uncertain, but its cultural significance is unquestionable. For Long Island residents and visitors, the estate represents a unique blend of history, architecture, and luxury. As legal proceedings move forward, many will be watching to see whether the landmark continues to operate as a world-class venue – or whether its fate is altered by modern financial pressures.
Questions & Answers: What Oheka Castle’s Bankruptcy Means for Guests, Events, and Ownership
1. Is Oheka Castle still open for weddings, tours, and hotel stays?
Yes. Despite the bankruptcy filing, Oheka Castle remains fully operational. All scheduled events are proceeding as planned, and the venue continues to accept new bookings for weddings, private events, and overnight stays.
2. Will my upcoming event at Oheka Castle be affected?
No changes are expected. The Chapter 11 bankruptcy is a financial restructuring tool that allows the business to remain open while reorganizing its debts. Guests with existing reservations should not be impacted.
3. Can I still book a future event at Oheka Castle?
Yes. The venue is still taking new reservations. Those interested in booking an event or stay should contact Oheka Castle’s event planning or hotel staff directly, as operations continue uninterrupted.
4. Who owns Oheka Castle right now?
Oheka Castle is still owned by Gary Melius through his company Kahn Property Owner LLC. While the property is under bankruptcy protection, Melius remains in control unless the court or creditors push for a change in ownership structure during proceedings.
5. What is Chapter 11 bankruptcy, and how is it different from foreclosure?
Chapter 11 is a type of bankruptcy that allows a business to reorganize its debts while continuing operations. It is different from foreclosure, which is a legal process that can result in a lender seizing the property. The bankruptcy filing has paused a previously scheduled foreclosure sale.
6. Will Oheka Castle be sold or shut down?
There are no current plans to shut down or sell the estate. The goal of the Chapter 11 filing is to allow the owner to keep the business running while resolving debts. However, the final outcome will depend on court proceedings and negotiations with creditors.
7. Is my deposit or contract safe?
As of now, there’s no indication that client deposits or contracts are at risk. Chapter 11 allows the business to meet existing obligations during reorganization. If you’re concerned, it’s always wise to maintain written confirmation and stay in touch with the venue.
8. What happens next in the legal process?
The owner must now submit a reorganization plan to the bankruptcy court, detailing how debts will be managed or repaid. Creditors, including the noteholder Taconic Capital, may review or challenge the plan. A judge will ultimately decide whether the plan is approved.
9. Has anything like this happened at Oheka Castle before?
Oheka has faced financial and legal challenges in the past, including foreclosure threats, redevelopment controversies, and even a high-profile shooting of its owner in 2014. Despite these setbacks, the estate has remained open and active for decades.
10. Where can I get updates about Oheka Castle’s status?
For the latest information, check the official Oheka Castle website, court records related to the bankruptcy case, or follow trusted local news sources such as LongIslandGuide.com for updates on ownership and operations.
