The family-owned care home specialist, based in Seaham, near Sunderland, has gone into administration with the loss of 12 jobs.
Dalton was working on a £3m care home job in South Tyneside for Careline Lifestyles on the site of the former Deneside Catholic Club when it ran into trouble with cash flow.
A spokesman for Careline Lifestyles said: “Building contractor Dalton Construction UK has gone into receivership.
“We are working with the legal teams to discuss the many options available to us, and can confirm that the building work will continue imminently, and that this will not affect the development of the project in any way.”
The firm was set up in 1995 and built care homes right across the country from Poole in Dorset to Dundee in Scotland.
It is the latest in a string of north east building firms that have failed in the last few month, including Newcastle builder Dorin Construction, steelwork firm F J Booth and dry lining specialist Classic Excel.