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Banner Holdings, the former contractor on Rafael Vi帽oly鈥檚 troubled 拢28m Colchester arts centre, was left with just 拢5,920 in the bank and no overdraft, it has emerged.

Gary Marshall, the administrator appointed on 4 June, said creditors were 鈥渘ot very likely鈥� to get anything back because the 拢13m-turnover firm had no assets.

According to Marshall鈥檚 report, the Chesterfield firm, which owes 拢3.1m to trade creditors, had only 拢5,920 in the bank. The firm had an overdraft facility of 拢1.6m with Lloyds TSB but, in the week that chancellor George Osborne renewed his plea for banks to lend to smaller businesses, it has emerged that Banner鈥檚 bank had reduced its overdraft to zero over the past 18 months.

The firm had hoped to recoup money from its legal battle with Colchester council over the arts centre (pictured), which was designed by Rafael Vi帽oly. The council kicked Banner off the project last year after a row about work being behind schedule and sub-standard. The contractor sought 拢1.3m in compensation; the council then launched a counterclaim of 拢4m.

The administrator said Banner鈥檚 claim was abandoned because it couldn鈥檛 meet an outstanding legal bill of 拢300,000. He added that the project 鈥渃ontributed significantly鈥� to Banner鈥檚 demise.

His report said: 鈥淭he directors are of the view that the company鈥檚 ability to generate work had been adversely affected by the negative publicity generated from the arts centre. In particular, there appeared to be a perception among the wider business community that [the council] terminated the company on the basis of poor performance, though the company denies this.

鈥淭he directors have identified five tenders, which, in their belief, the company 鈥檞on鈥� based on price; however, such contracts were not ultimately awarded in its favour. Had the company been successful in winning these contracts, then about 拢10m would have been added to the company鈥檚 order book.鈥�

The report also reveals that Banner tried to merge with Altrincham-based M&E contractor Bowdon Industries in March. Bowdon acquired a 50% share in Banner at that point, but following a legal adjudication that suggested Banner would lose its arts centre claim, Bowdon provided no further investment.

When the administrator was appointed, Banner had six contracts on its books, but five of those were terminated by clients and the remaining job is expected to be given to a different firm.

Mace is now the project manager on the arts centre, which will cost 拢28m - up from an original estimate of 拢17m - and will be finished in September 2011, three years late.