Oheka Castle owner Gary Melius has asked a judge to throw out a foreclosure lawsuit against the castle and award him damages of at least $10 million.
In legal papers filed in state Supreme Court in Suffolk County, Melius claims Miami, Fla.-based LNR Partners Inc., which services the castle’s mortgage loan and sued to foreclose on the castle in June, failed to pay out money from accounts funded by Melius.
Those accounts were intended to allow Melius to run the castle and do needed repairs and maintenance work, he said in the suit. The failure to pay the funds forced Melius to incur “significant out-of-pocket expenses,” Melius charged in papers filed last week.
The castle operates as a wedding palace, catering hall and small hotel, as well as a gathering place for Long Island’s political elite.
LNR, Melius charged in his legal papers, “is seeking to obtain control” of the castle and take over a proposal to build 190 condominiums and a Jack Nicklaus-branded championship golf course on the grounds of Oheka and adjacent Cold Spring Country Club.
In the foreclosure lawsuit, LNR and U.S. Bank N.A., the trustee for the bondholders who own the loan on the castle, charged that Melius fell behind on the $3.1 million he was supposed to pay in annual rent.
LNR could not be reached before deadline Thursday.
Reached late Thursday, Melius said his legal papers speak for themselves.
Last week, Melius said the plans to develop Oheka and the country club were all but “dead,” since he and developer Stan Gale could not come to terms. Gale did not respond to requests for comment last week. An attorney for the club could not be reached late Thursday.
Oheka owes $26 million on its two mortgage loans, according to an August report by Trepp LLC, a Manhattan-based company that tracks commercial mortgages. The castle has two loans, Trepp reported this month. The larger loan’s balance is nearly $21 million; Trepp reported that “no loan payments have been made since December 2015.” The other loan, with a balance of $5.14 million, was listed as current.
Melius defaulted on the castle’s previous, nearly $28 million mortgage in 2013, according to Trepp. He negotiated a modification of the loan the after year and received a five-year reprieve, according to Trepp.