The owners of the Headway Hotel in Morecambe have gone into administration.
The Insolvency and Companies Court heard that Carlauren Group investors put a total of £76m into projects and that £50m was unaccounted for.
According to the BBC, Carlauren’s chief executive Sean Murray has been accused of misappropriating company funds, which he denies.
Investors applied to appoint administrators to control the company’s assets.
A barrister representing some of the investors alleged significant sums had been transferred into Mr Murray’s personal account.
Mr Murray, who represented himself at a hearing in London, previously told the court there were no missing millions and although money had been transferred to his personal account; he said it was being held in trust for the company.
Carlauren, which is based in Somerset, bought 25 properties across the UK, saying they wanted to set up a network of luxury care homes, among them The Headway.
The scheme was funded by selling individual rooms in those properties to investors for about £100,000 a time – but most of those homes never opened.
After Judge Sebastian Prentis granted the application to appoint administrators, Mr Murray said: “I am afraid I lost control. I hope they act in the best interest of everyone.”
Carlauren managed and operated resorts, hotels, residential and care facilities, and had architecture, engineering and interior design divisions.