Aysha Khan, director of Park Hall Hotel Ltd, has appointed insolvency practitioners Smith & Barnes to handle the liquidation after Ms Khan concluded that the company is now insolvent.
It follows the sudden closure of the hotel in February, which left wedding couples fearing for their deposits as they scrambled to find alternative venues to save their big day.
The hotel has since been acquired by a company shareholder, Mr Harwinder Singh, 48, who paid £3million for the business following its closure.
Smith & Barnes say the proceeds of the sale were used to repay a business loan of £4million to Goldcrest Finance, with the shortfall written off.
Since the sale, the company’s board of directors – which includes Mr Singh – has decided to put Park Hall Hotel Ltd into voluntary liquidation.
It is not known at this stage whether new owner Mr Singh intends to reopen the hotel he has acquired under a new company.
The insolvency practitioners added that next week, Wednesday, May 4, the shareholders will pass a written resolution to wind up the company ahead of its proposed liquidation.
In a letter to creditors, Smith & Barnes said: “Due to the Covid-19 pandemic, the company was unable to trade due to the restrictions put in place.
"Even when the business was able to trade, substantial trading restrictions were still in place and the company was unable to trade to its full capacity, and therefore began with cash flow problems.
"The company secured a small bounce-back loan from the government funding scheme which was utilised to pay the expenses of the company.
"This removed some pressure in the short-term, but unfortunately, this was not sufficient to support the company’s cash flow and ongoing cost.
"The company was unable to pay its debts as and when they fell due.
“In view of the company’s financial position, on April 25, the board of directors resolved that the company should go into creditors’ voluntary liquidation.