The anticipated sale of Fairmont Le Château Montebello to Westmont Hospitality is facing a late legal challenge from a competing Quebec consortium seeking to stop or delay the transaction.

Court documents obtained by Connect CRE show that the group, representing interests associated with the Varin and Lavy families, filed a notice of objection July 30. It alleges its all-cash proposal exceeded Westmont’s offer by approximately $10 million and would produce a greater recovery for creditors.

The challenge comes less than three weeks after Connect CRE reported that Westmont had agreed to purchase the historic resort through a court-supervised receivership process.

PricewaterhouseCoopers, acting as receiver for the hotel’s insolvent owner, selected Westmont’s offer after a months-long sale and investment solicitation process administered with Colliers. The sale cannot proceed without court approval.

The Quebec group says its bid was put at a disadvantage because it planned to replace Fairmont as hotel manager, while Westmont would keep the company in place. Fairmont had warned it could take legal action if its management agreement was terminated.

The group says it offered to set aside cash to cover any successful Fairmont claim. A July 10 rejection letter shows it had also provided deposits totalling $4.5 million.

The allegations have not been tested in court. Hearings are scheduled for Aug. 26 and 27.

Built in 1930 as the private Seigniory Club, Château Montebello is recognized as the world’s largest log structure. It opened to the public as a Canadian Pacific resort in 1970.

The hotel has served as the backdrop for major international gatherings, including the 1981 G7 summit and the 2007 North American Leaders’ Summit.

Located on the Ottawa River between Ottawa and Montreal, the resort has 211 rooms, an 18-hole golf course, a 100-slip marina, a spa and approximately 17,000 square feet of meeting and event space.

The offering also includes about 685 acres of excess land with future development potential. Approximately $17 million was invested in capital improvements between 2019 and 2025.

The court challenge places the future ownership of one of Quebec’s best-known heritage hotels back in question four years before its centennial.