Court rules in favor of lenders in bid to force Oheka Castle foreclosure

New York /
Apr.April 08, 2019 03:05 PM

New York State Supreme Court Judge Elizabeth Emerson has moved the potential foreclosure of the historic Oheka Castle in Huntington one step closer by dismissing owner Gary Melius’ claim that lenders withheld escrow payments and did not participate in good faith discussions about a loan workout agreement, Long Island Business News reported. Emerson also appointed David Rosenberg, a senior partner at the Garden City-based law firm Rosenberg Fortuna & Laitman, to calculate the debt owed by Melius, a controversial Long Island real estate developer. LIBN estimated that debt could total more than $35 million, although Melius told Newsday that the figure is just $28 million. Melius, who survived an apparent assassination attempt in 2014, has been fighting for three years with lenders led by U.S. Bank and its Florida loan servicer LNR Partners. The latter initially claimed that Melius failed to pay two commercial mortgage-backed securities totaling $29.79 million. LNR began foreclosure proceedings in June 2016, but Melius then countersued for $10 million and sought to dismiss the foreclosure action. In January, Emerson appointed Jeffrey Kolessar, vice president of Philadelphia-based GF Management, to serve as Oheka Castle’s overseer. Oheka Castle, built in 1921 for late financier Otto Kahn, fell into disrepair before Melius bought it in 1984 and transformed it into a catering and event space. Today the Suffolk County property has 126 rooms, 450 windows and doors and 4,000 slate roof tiles, along with 3,000 trees and bushes. Musician Kevin Jonas and political operative Huma Abedin have both had weddings there. The court battle is expected to continue for another few months before the property can be turned over to U.S. Bank and LNR, who would sell it via an auction. Melius, however, is hoping to prevail. He told Newsday that he has plans to build 37 condos in Oheka Castle, pending the Town of Huntington’s approval. [LIBN]


Related Articles

arrow_forward_ios
From left: Erica Grossman, Michaela Keszler, Maggie Keats, Margaret Harrington and Maria Babaev (Photos courtesy Douglas Elliman)
Douglas Elliman honors tristate brokers after a chaotic year
Douglas Elliman honors tristate brokers after a chaotic year
(Getty)
Summer camps can reopen, but much remains unknown
Summer camps can reopen, but much remains unknown
Chris Whittle and his East Hampton estate (Photos via Trulia and Meridian)
Education entrepreneur relists East Hampton estate for $95M
Education entrepreneur relists East Hampton estate for $95M
This three bedroom house is the first ever home built with 3D printing technology. (Realtor)
“3D-printed” home in Calverton listed at $300K
“3D-printed” home in Calverton listed at $300K
Sen. Anna Kaplan (Photos via Wikipedia Commons; iStock)
NY Senate to pass housing discrimination bills
NY Senate to pass housing discrimination bills
The lack of inventory has caused prices to skyrocket.  (Getty)
Suburban home inventory is depleted, but demand rages
Suburban home inventory is depleted, but demand rages
Long Island homes are flying off the market. (Getty)
Long Island home sales spike in Q4
Long Island home sales spike in Q4
New York Senators James Skoufis, Kevin Thomas, and Brian Kavanagh. (Facebook via Skoufis, Thomas, and Kavanagh respectfully)
Lawmakers call for stiff penalties, reform after housing discrimination probe
Lawmakers call for stiff penalties, reform after housing discrimination probe
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...