Bank of Ireland has appointed a Receiver to Jackson's Hotel in Ballybofey.
A statement from hotel owner Barry Jackson said that the decision had been made "with profound regret."
He added: "The directors of Jackson's Hotel made sterling efforts to continue to trade and being fully compliant this outcome is very disappointing and unexpected.
"We would like to thank all of our suppliers and confirm that the business will continue to trade as a going concern.
"All staff remain in position and we are reassured that all wedding deposits and vouchers will be honoured. We would like to thank especially out loyal and long standing customers for their support and a special thanks to the local people of Ballybofey, Stranorlar and beyond.
"Our final word of thanks must go to our excellent hardworking loyal staff, to them we are truly indebted."
Jackson's is one of the county's most well known hotel and is a major employer in the Finn Valley.
The news comes in the same week as the Seaview Hotel in Bunbeg announced it was closing with the loss of 35 jobs.
If you have a story or want to send a photo or video to us please contact the Donegal Now editorial team. Between 9am and 5pm Monday to Sunday please call 074 9112712. Between 5pm and midnight please call or text 086 792 2103. Or you can email [email protected] at any time.