While the settlement history of the United States means that it is not the place to find centuries-old castles and fortresses, a number of castle-like mansions that prominent individuals had built to mirror the palaces of Europe in years of yore are dotted throughout the country.
As many wait for the finale of the HBO show “The Gilded Age” on Aug. 10, a Long Island mansion that New York financier Otto Hermann Kahn had constructed in the period just after that era has filed for Chapter 11 bankruptcy.
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Constructed between 1914 and 1919, Oheka Castle was designed to look like a French château as a 127-room estate on a 443-acre plot full of winding gardens.Â
Nestled in the Gold Coast of Long Island at the halfway point between the Hamptons and New York City, what even today remains the third-largest private residence in the U.S. has in the modern age been used as a hotel and venue for events and film sets.
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‘I could no longer keep them at bay’: Oheka Castle owner on creditors and debt
While the property comes with a long history that landed it on both the National Register of Historic Places and list of Historic Hotels of America, this storied past has not translated into good finances in 2025.
Developer and owner Gary Melius filed for Chapter 11 bankruptcy at the start of August after running up over $60 million in debts to various creditors.
Years of legal battles over the rising debt have led to a situation in which the bankruptcy filing was the only way to prevent a looming foreclosure and buy the hotel time to restructure what it owes.
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In the 2010s, Melius defaulted on a $28 million commercial mortgage-backed securities loan that later reached up to $50 million with interest.
“I could no longer keep them at bay,” Melius said of the creditors to the Real Deal. In court documents, Melius reported that the business entity for Oheka Castle has no more than $67 in a checking account but over $92 million in assets due to the value of the property.
As of August 2025, the hotel is continuing to conduct mansion tours. An overnight stay on the property starts at $495 for the basic chateau room and can reach up to $1,295 a night for its top Olmsted suite.
Image source: Shutterstock
Hotel reassures guests that ‘everything is still happening’ as it looks to restructure debt
“Right now, it’s really just restructuring of pre-existing debt,” hotel manager Steven Kessler said to a Long Island branch of CBS. “[…]Â We are open for business. We have all of our events for 2025-2026. Everything is still happening.”
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The hotel’s beauty and historical significance led some local residents to express fears of the communal loss to New York history if restructuring is not worked out and ultimately leads to foreclosure and liquidation.
“You could walk into that venue and not need anything,” Ashley Pastore, who got married in the castle a few years ago, said to CBS. “It’s extraordinary. You could get married there and not put one decoration up. It’s history itself.”
Related: One of the world’s most iconic hotels is celebrating 100 years
