Rumors swirling on social media about Oheka Castle and current foreclosure proceedings concerning the property are effecting the castle’s catering business.
In a letter to clients, Oheka owner Gary Melius reassures customers of the catering venue that it’s safe to book an event as he expects to win the legal dispute that has thrust him into court, and even if he doesn’t, any action that would effect the business is at probably two years out.
The Castle is in foreclosure proceedings brought by lender LNR Partners in 2016 which claims Melius deaulted to the tune of $37 million, after penalties. Melius claims he owes $28 milion, which is is ready to pay. A dispute over $2.6million in a capital expenditure account that he funded is at the heart of the disagreement.
According to court documents, Melius had requested the funds be released for a capital project which needed to be done. The lender withheld the funds, forcing Melius to pay for the capital expenditures with other funds. Receipts were provided to the lender but LNR continued to withhold repayment.
Needing to recoup the funds, Melius directed the Lender to take the next payment directly from that account. Even though they were holding ample funds, the lender cited a clause in the agreement that the payment was to be put in a drop box account and therefore put Melius into technical default that inflated the monies owed.
Melius explained “This is the heart of our dispute. Without the default, I owe $28M, but they claim I owe $37M, the discrepancy is due to their accelerated default. I have the money to pay them the amount that they are rightfully due, the $28M.” These claims are supported in the court papers filed for the current litigation.
Melius claims the lender has a history of similarly manipulating properties to place them in receivership and eventual foreclosure.
“This lender is a large firm that manages approximately $131 billion and they have a history of improperly seizing properties that they were the lender for,” Melius said. “That is what they are doing in this case as well.”
The lender is currently under order to produce proof of its claim to the court by May 30, Melius said.
Melius said his attorneys are preparing an appeal and that the projected time for a final decision on the case is approximately two years until all is settled.
Melius stated “If I lose the case, which I don’t think is likely, I will meet their terms and pay the full accelerated amount. There is no cause for concern. The Castle is here, operating as usual, and will be here for many years to come.”