The promotional group Marketing Gloucester is folding.
In a statement released this afternoon its board announced the news "with deep regret" saying it will cease trading immediately.
It comes after a spate of financial troubles rocked the body, which was formed in 2013 to help promote the city centre..
Last month the Council voted to take back control of Gloucester events including Tall Ships and Gloucester Carnival and around the same time Marketing Gloucester's then chief executive Jason Smith was sacked, after a damning report raised questions over its accountability, governance record keeping and cash-flow.
At the end of last year the firm was loaned £240,000 by Gloucester City Council as part of a deal to help keep it alive until March, but at the time councillor Jeremy Hilton called the bailout a "disaster".
“We have always supported a vehicle used to promote the city of Gloucester worldwide and to get people to come to us," he said.
“Our concern is of course is this arms-length organisation which was set up and 100 per cent owned by Gloucester City Council, and chaired by the former leader of the council for eight years, has such poor control mechanisms and financial mechanisms.
“We have got to the situation where the council has had to bail it out to the tune of £240,000.
"It really is a disaster.”
A former employee of Marketing Gloucester, Debbie Hill labelled the decision only "the tip of the iceberg" and added she was sure more information on the body would come out.
A scrutiny meeting just before Christmas discussed two independent reports into the function of Marketing Gloucester, which said the company was “financially volatile” and “too focused on events”.
The independent consultants behind the reports, Grant Thornton and Melanie Sensicle and Jason Freezer, advised the city council to take these aspects – budgeting and events management – back in-house, which they promptly did.
Councillor Steve Morgan, cabinet member for culture and leisure, said after that decision: “We are putting money aside.
"Events are going to change.
“It is public knowledge there are things that, in hindsight, would not have been allowed to happen the way they did.
“Various things needed to be improved.
"But we’ve recognised that now, we’ve got to the point of looking to put them on a much more sustainable footing.
"We’ve learnt lessons, we’re moving ahead.”
A statement from the City Council today says they are "saddened" to hear the news.
"We remain committed to place marketing and will be reviewing how we can best move forward with this in the future," leader of the council Richard Cook said.
"We will be following up with stakeholders to hear their views to help us with this process."