It is much harder for slimmer people to lose pounds of weight. So I would have to disagree with the contest guidelines and you use body-fat percentage rather than weight. This will encourage, along with a diet rich in protein, the use of resistance training to add, or at least retain, lean body mass -- muscle (which will help accelerate fat loss). Many who attempt "weight loss" end up losing a lot of muscle and actually becomeunhealthier.
Note that considering weight as the variable here is also terrible because of water retention. I can lose 15lbs in just one week with the use of diuretics and watching my carbohydrate and sodium intake and still be just as "fat" as I was in the beginning. The 260lber can likely lose 20-25lbs of weight in a week using the same method without breaking a sweat, whereas the 140lber would be lucky to shed 10. it is an unfair metric.