Bruntwood is working with administrators at BDO to keep the new £40m 19-storey hotel at Manchester Business School on track after main contractor GB Building Solutions went into administration on Monday.
A spokesman for BDO said work had stopped on all sites where GB was contractor and all 350 staff were made redundant overnight.
Bruntwood added in a statement on Tuesday: "We understand that GB Building Solutions has entered administration. The delivery of the new Manchester Business School hotel and executive education centre on the Oxford Road campus, in partnership with our investor M&L Hospitality Group, is not dependent on GB Building Solutions."
BDO LLP business restructuring partners, Tony Nygate and Graham Newton, were appointed joint administrators of GB Group Holdings and GB Building Solutions on Monday 9 March 2015. The companies operate from headquarters in Sunbury, Surrey, with offices in Newcastle, Rugby, Wakefield and Stockport.
BDO said: "In recent months, the companies experienced trading and cash flow issues, including three substantial claims on contracts, which contributed to a deterioration in their working capital position. Efforts to raise funding to secure the future of the companies were unsuccessful, leaving no option left but to place them into administration. Regrettably, it has been necessary to make approximately 350 employees redundant."
At this point in time, other entities within the wider GB group are not in administration.
BDO business restructuring partner, Tony Nygate, said: "The companies experienced a serious deterioration in their working capital position and as a result were unable to continue to operate. Regrettably, it has been necessary to make all employees redundant, save for a small number to assist the administrators. The joint administrators are actively seeking purchasers for all or part of the business or assets, and going forward, our priority will be to maximise recoveries for the creditors."
Bruntwood is developing the 326-room hotels on Booth Street West in the Oxford Road Corridor behind the original business school. The hotel operator will be IHG with its Crowne Plaza and Staybridge Suites brands, the former with 210 rooms and the latter with 116 rooms. The development was designed by BDP and Leach Rhodes Walker and will link to a new education centre extension for the business school's corporate management courses. The project is part of the University of Manchester's £1bn estates renewal programme.
Other sites affected by the GB administration include a £7m 60-bed residential care home for Cumbria County Council in Barrow.