Gary Melius files for Chapter 11 bankruptcy to delay sale of Oheka Castle

Oheka Castle owner Gary Melius said he has filed for Chapter 11 bankruptcy to hold off a foreclosure sale of the historic property.

He said the castle has been in foreclosure for 10 years but was to be put up for sale this week, so he filed for bankruptcy to save it.

“I had a foreclosure; I was going to lose the place on Aug. 7. I’ve been in foreclosure for 10 years, but the judge gave them permission to sell it, so I could no longer keep them at bay," he said, referring to banks and lenders. An auction had been scheduled for Thursday.

According to court documents, the claim was filed in U.S. Bankruptcy Court for the Eastern District of New York last Thursday.

The property, listed in the filing as Kahn Property Owner LLC, owes $63.5 million to creditors. The filing says the property has zero cash on hand with $57.27 in a checking account. The property has $92.8 million in assets, which includes the property, machinery, equipment and vehicles.

Oheka Castle, on West Gate Drive in Huntington, is a popular wedding venue, restaurant and hotel. The 109,000-square-foot, French-style chateau remains the second-largest private residence ever constructed in the United States, according to the castle's website.

In 1941, the castle appeared as Xanadu in "Citizen Kane," and more recently, Taylor Swift filmed her music video for the song "Blank Space" there. 

Melius said Oheka Castle Hotel and Estate will continue to operate.

“The weddings are all still on,” he said. “No one should worry about it.”

Melius, a political power player on Long Island, bought the property in 1984 and lives there. 

Joseph S. Maniscalco, the Wantagh-based attorney representing him in the bankruptcy proceeding, said in an email Melius will "continue to own and operate his iconic venue while concurrently finalizing a multiyear plan to develop luxury condominiums on the property. We intend to work with all parties and the Court to successfully emerge from Chapter 11."

The castle is in receivership to manage its finances, Melius previously told Newsday. A receivership is a court-appointed party responsible for managing business operations.

A company seeks Chapter 11 protection to allow it to reorganize its finances without the threat of lawsuits from creditors.

In March 2023, the town board gave the green light for Kahn Property Owner LLC to build the Residences at Oheka II, a four-story building with 95 units of housing on the west side of East Gate Drive.

A month later, the Cold Spring Country Club — which is next to the castle — and its development partner, Cold Spring Development Partners LLC, filed a lawsuit against the town, Kahn Property Owner LLC, Jeffrey Kolessar and David Rosenberg, alleging the town board “abused its authority” when it granted Melius an additional use permit, which he needed because the castle is in the town's historic building overlay district. 

The suit was dismissed in October 2023. Representatives of the country club could not be immediately reached.

The status of the Residences at Oheka II of any application before the town was not immediately available, town officials said.

In a text to Newsday, Town Supervisor Ed Smyth said he applauded Melius “for his decades-long efforts to restore and maintain Oheka Castle,” adding that his “extraordinary” efforts should not be overlooked.

“The Town will monitor the legal case to ensure the public’s interests are protected, specifically that the castle and surrounding property is maintained,” Smyth said in the text. 

On Feb. 24, 2014, Melius was shot in the head outside the castle — a crime that remains unsolved.

In surveillance video released by police, Melius was seen getting into his Mercedes when a masked gunman approached and fired three shots.

Melius was hit once. The shooter was seen fleeing in a light-colored Jeep Grand Cherokee, Suffolk police have said.

He spent months recovering, and a who’s who of Long Island politics visited him in the hospital, including then-county executives in Nassau and Suffolk.

In a video released by Melius after the shooting, he said: "I want you to know that I'm healing, getting better, and I'm looking forward to just starting over again." 

Melius has advertised a $100,000 reward for information that would help solve the shooting and has called on the FBI to assist Suffolk police in the investigation.

Despite the FBI joining the investigation, no arrests have been made.

Newsday's Nicole Fuller and James T. Madore contributed to this story.