Château Montebello: the bid that kept Fairmont beat a higher price

The receiver's first report describes Château Montebello as the world's largest log construction, a rustic lodge built in 1930 on the Outaouais River at Montebello, per the First Report of the Receiver, Jan. 28, 2026, para. 3. The sale application fills in what went to market around it: 211 rooms, an 18-hole Stanley Thompson-designed golf course, a 100-slip marina, about 17,000 square feet of meeting space, five food and beverage outlets, and approximately 685 acres of excess land, per the Application for Approval and Vesting Order, July 24, 2026, para. 4. The approval order's schedule of those excess lands lists 915 cadastral lots across 22 pages, per the Approval and Vesting Order, Sept. 10, 2026, Annexe E, pp. 18–39.

The owners sit at the bottom of a chain that runs to China Evergrande Group. 4345118 Canada Inc. holds registered title as prête-nom for Millennium Golden Jiachen Hotel Holdings Ltd., formerly Evergrande Hotel Hold Ltd., under a nominee agreement dated as of December 17, 2014; above them is a Hong Kong company half-owned by ANJI (BVI) Limited, a wholly-owned Evergrande subsidiary. The High Court of the Hong Kong Special Administrative Region ordered Evergrande into compulsory liquidation on January 29, 2024. Fairmont Hotels Inc., now Accor Management Canada Inc., has run the hotel under a management agreement dated September 29, 2006, per the Application for Approval and Vesting Order, July 24, 2026, paras. 5, 12–13.

On September 10, 2026, Justice Martin Castonguay of the Superior Court of Québec approved the sale of the resort to MB Resort GP Ltd., as general partner of MB Resort LP, and kept the unredacted purchase agreement under seal until the receiver certifies closing, per the Approval and Vesting Order, Sept. 10, 2026, paras. 4, 9, 37. The bid behind the order was Westmont International Development Inc.'s, and the receiver had told the court it was not the highest in the final round.

A term loan and an indirect shareholder

Caisse Desjardins de Brossard made Millennium a $13,500,000 term loan under a financing offer of July 26, 2018, guaranteed by 4345118 Canada Inc. and secured by hypothecs in the amount of $21,000,000 plus interest at 20% a year. As of June 3, 2025, Desjardins alleged in its application, Millennium had failed to repay at the end of the term, and "a material adverse change has occurred given the financial situation of its indirect shareholder, Evergrande Group." Desjardins served a demand and a notice under s. 244 of the BIA that day, and put the debt at $10,796,169.03 on September 18, 2025, per the Application for the Appointment of a Receiver, Oct. 9, 2025, paras. 9, 13–28. The receiver later wrote that "the difficulties faced by the Debtors are mainly related to the failure of the Evergrande group," per the First Report of the Receiver, Jan. 28, 2026, para. 33.

Registrar Audrey Lessard appointed PricewaterhouseCoopers Inc. receiver on November 3, 2025. Fairmont made itself heard on the first day: its counsel asked for a reservation of rights, and the registrar found none necessary, being "of the opinion that the Operator will be able to assert its rights and remedies in due course," while noting the importance of the non-disturbance agreement between Desjardins and Fairmont, per the Order Appointing a Receiver, Nov. 3, 2025, paras. 6–10, 12.

PwC's statutory notice eleven days later put the book value of what it took over at $47,597,891, of which $34,117,242 was the hotel property, $5,232,163 cash and $3,000,000 a term deposit held by Desjardins. Against it the notice listed $53,143,440 in unsecured liabilities, $47,999,900 of them "loans payable to ultimate parent company," per the Notice and Statement of the Receiver, Nov. 14, 2025, para. 1, Apps. 1–2.

Card deposits, a capital reserve, and Fairmont's rights

The hotel kept operating, short of cash. Moneris told Fairmont and the receiver it would hold back 20% of future card deposits, up to $3 million, against chargebacks; the receiver negotiated that down to 10% and $1.8 million, and about $1.4 million was already held by January 22, 2026. Fairmont had deferred repairs for lack of funding and, to preserve liquidity, had not set aside the monthly capital reserve since November 2025, per the First Report of the Receiver, Jan. 28, 2026, paras. 13, 30. The interim financing the receiver proposed priced at Desjardins prime plus 5%, with a 1% fee of $63,800.

Justice Daniel Urbas granted the amended and restated order on February 25, 2026: an interim facility from Desjardins of up to $6,380,000, secured by a $7,656,000 charge ranking behind only an administration charge raised to $1,000,000, and a sale process run by the receiver with Colliers International (Quebec) Inc. as agent. The order stayed third-party rights of first refusal and first offer "only for the duration of the SISP," per the Amended and Restated Order, Feb. 25, 2026, paras. 15, 18–19, 26, 28, 30, 48.

The most significant of those rights, in the receiver's account, were Fairmont's. The 2006 agreement runs to December 31, 2031 with up to five further five-year terms, gives Fairmont "sole and exclusive control, discretion, and authority" over operations, and carries rights of first offer and first refusal, per the First Report of the Receiver, Jan. 28, 2026, paras. 45–49. Fairmont contested on February 16, arguing among other things that the court had no jurisdiction to extinguish rights between two creditors inter se. Justice Urbas deferred that debate to the sale approval hearing, reserving Fairmont's right to object there "if the proposed transaction does not contemplate an assumption of the existing HMA or an amended HMA with Fairmont's consent," per the Application for Approval and Vesting Order, July 24, 2026, paras. 17–20.

Three rounds

Colliers launched on March 2, 2026 to a database of approximately 3,247 prospects and more than 100 contacts from the receiver. By the April 7 deadline, 118 non-disclosure agreements had been signed and 33 letters of intent received, and 19 bidders went on to the second phase. On May 1, before binding offers were due, the receiver posted a memorandum telling them that whether they assumed the management agreement was "an important consideration," and that it "may discount Binding Offers which are determined to represent lesser net benefits to the Debtors and its stakeholders, or to represent greater execution risk or risk of Court approval," per the Second Report of the Receiver, July 24, 2026, paras. 13–24.

Eleven binding offers arrived by May 13, and the receiver rejected seven. On June 19, in consultation with Desjardins and the Evergrande creditors, it rejected every remaining offer, citing "a number of conditions which did not satisfy the stakeholders" and a belief "that still more value might be realized," and gave all 19 bidders one week to try again. Five offers came in by June 26; one was disqualified, per the Second Report of the Receiver, July 24, 2026, paras. 27, 31–36.

The receiver chose Westmont, and brought one point to the court's attention itself: the bid "does not represent the highest headline cash consideration among the Binding Offers received in Phase 3." A competitor had offered a higher stated cash price "on the express condition that the Receiver disclaim or terminate the HMA." A disclaimer, in the receiver's assessment, would bring a likely contestation by Fairmont and "its potential assertion of a significant unsecured damages claim against the estate," which would rank with the other unsecured claims and "could reduce or eliminate the economic benefit of the higher headline purchase price," per the Second Report of the Receiver, July 24, 2026, paras. 41–43. PwC modelled net recoveries under both bids in a sensitivity analysis filed under seal. It also had nothing left to litigate with: the interim facility was fully drawn and had reached maturity, and neither Desjardins nor the Evergrande creditors had indicated any willingness to advance more (paras. 51, 55).

The creditor carrying that risk agreed with the choice. Evergrande's and ANJI's claims appear to represent more than 99% of the aggregate unsecured claims (para. 48), and Osler, writing for Evergrande's liquidators and ANJI on July 10, said a transaction that did not assume the agreement "would likely have resulted in a material damage claim" that "may be so material that it would erode any potential net benefit to CEG." The letter adds that "CEG is the fulcrum creditor, such that in practice it is the party which would bear the risks and cost of litigation," per the Second Report of the Receiver, July 24, 2026, App. 7, pp. 40–42.

What MB Resort takes

The asset purchase agreement is dated July 16, 2026. The receiver describes Westmont as a Delaware corporation with a place of business in Mississauga whose group has had ownership interests in, operated or advised over 1,100 hotels, and reported that Westmont meant to assign the agreement to "an entity created for such purpose," per the Second Report of the Receiver, July 24, 2026, paras. 58–59. The vesting order records that assignment, to MB Resort GP Ltd., by an agreement of July 30, 2026, per the Approval and Vesting Order, Sept. 10, 2026, para. 4.

The price is all cash, with a deposit of not less than 10% already paid and no financing or due diligence condition. The purchaser assumes the management agreement in full, so the hotel "will continue to be operated under the Fairmont brand and management following Closing," per the Application for Approval and Vesting Order, July 24, 2026, paras. 73–74. It also takes the collective agreement of June 8, 2023 with Syndicat UNIFOR, section locale 4281, the emphyteutic lease of May 31, 1993 between Corporation Hôtelière Canadien Pacifique and the federal Crown, and the registered marks "Le Château Montebello" and "Club Seigniory Club." Cash, receivables, sums held by Fairmont, and the debtors' payables and other liabilities accrued before closing, including those Fairmont incurred on their behalf, stay behind, per the Approval and Vesting Order, Sept. 10, 2026, Annexe A, pp. 11–14; Annexe F, p. 40. All of the more than 350 employees at the property transfer, and the purchaser absorbs 75% of their accrued and unused time off, banked overtime and vacation pay, per the Second Report of the Receiver, July 24, 2026, para. 64(a).

Part of the land carries heritage status: the Manoir Louis-Joseph Papineau was classified in 1975 and the Site patrimonial du Domaine-Louis-Joseph-Papineau in 2024, and the Minister of Culture and Communications holds a right of pre-emption under ss. 54 to 57 of the Cultural Heritage Act, per the Application for Approval and Vesting Order, July 24, 2026, paras. 49–53. The order directs the receiver to give the Minister 60 days' notice and makes vesting of the designated heritage lands conditional on the right going unexercised. If the Minister exercises it, those lands become excluded assets, "the Purchase Price being reduced by the amount allocated to them (namely $2,000,000)" [translation], per the Approval and Vesting Order, Sept. 10, 2026, paras. 21–23. That allocation is the only piece of the price the order discloses.

The order, and what stays with the receiver

The application was heard in Montréal on August 26 and 27, 2026, although the file remains in Gatineau, per the Claims Process Order, Sept. 10, 2026, para. 5, p. 9. The vesting order recites submissions from counsel for the receiver, the purchaser, Desjardins "and the other parties present at the hearing" [translation]. On the receiver's certificate the assets vest free and clear of every charge, including rights of first refusal and restrictions on transfer, save the permitted encumbrances, which include the heritage designations and the emphyteutic lease. The purchaser becomes the employer bound by the collective agreement under art. 2097 of the Civil Code of Québec and s. 45 of the Labour Code, per the Approval and Vesting Order, Sept. 10, 2026, paras. 3, 12, 20; Annexe H, p. 46.

Out of the proceeds, the receiver is authorized to pay Desjardins without further order: its pre-receivership secured claim and the interim financing obligations as shown on its payout statement, adjusted for per diem interest to the date of payment, per the Approval and Vesting Order, Sept. 10, 2026, para. 28. The statement puts the total due at July 15, 2026 at $17,913,636.48: $11,412,595.19 on three term loans, $6,467,400.67 on the interim facility and $33,640.62 in legal fees, per the Second Report of the Receiver, July 24, 2026, App. 10, p. 46. The receiver told the court the purchase price "materially exceeds" the secured debt, the interim financing and the administration charge combined, per the Application for Approval and Vesting Order, July 24, 2026, para. 115.

The rest stays with PwC until a further order, and the receivership goes on. The February order ends the receiver's mandate on "the sale of all the Property," per the Amended and Restated Order, Feb. 25, 2026, para. 8(a). The vesting order declares that this sale "does not constitute a sale of all of the assets of the Debtor within the meaning of paragraph 8" [translation] of the February order, continues the proceedings, authorizes a Chapter 15 application in the United States, and keeps the bid matrices, the sensitivity analysis, the estimated distribution and the management agreement sealed until the court orders otherwise, per the Approval and Vesting Order, Sept. 10, 2026, paras. 29, 31–32, 38, 40.

The claims process order fixes November 3, 2025 as the determination date and a bar date of 5:00 p.m. Montréal time sixty days after the order, with later dates for claims arising from a disclaimer. A creditor has 15 days to appeal a notice of revision or disallowance, and the appeal proceeds on the record, not de novo, per the Claims Process Order, Sept. 10, 2026, paras. 10(e), (k), 15, 18. With Fairmont's contract assumed and the workforce transferred, the receiver told the court it expects the only significant unsecured claims to be those of Evergrande and ANJI, whose advances it puts at approximately CAD $34 million and CAD $13 million, per the Application for Approval and Vesting Order, July 24, 2026, paras. 14, 119.