The former Garibaldi Budget Inn in Squamish, B.C., changed ownership just before the 2010 Olympics got underway. (hotelscombined.com)

Vancouver's Olympic Organizing Committee is suing the former owners of an inn in Squamish, B.C., who allegedly sold the hotel just prior to the 2010 Winter Games, leaving guests without accommodation.

According to a statement of claim filed in B.C. Supreme Court Tuesday, the Vancouver Olympic Organizing Committee (VANOC) signed a contract with the Garibaldi Budget Inn in 2003.

The hotel was to provide rooms for VANOC's workforce throughout the Games for a fee of more than $150,000. The deal fell through as a result of, "negligent representations," and, "false and reckless dealings" by the hotel's owners, VANOC said in its claim.

The claim suggested the hotel owed creditors $1.7 million when it was sold without VANOC's knowledge.

False statements alleged

Until the business suddenly changed hands in a court-ordered sale, one of the hotel's named owners, Ed Sylvan, maintained that all was well and that the room bookings were secure, according to the claim.

VANOC alleges those statements were false and made in an effort to misappropriate its funds.

VANOC knew nothing about the hotel's financial problems until two months before the Games were to begin, the claim says.

At that time, the new owner, the Squamish Budget Inn, refused to honour VANOC's room deal, forcing it to scramble at the last minute to find rooms for its workers at considerable extra expense, according to the claim.

VANOC is seeking an unspecified amount in damages.

None of the Olympic organizer's claims have been proven in court and the people named in the suit have not yet filed any documents in their defence.