Boss of St Ives company Cream Club vows creditors owed more than £1m will be paid back
- Credit: Archant
The former boss of a St Ives company which has gone into administration owing more than £1 million - including £150,000 in unpaid wages to staff – has pledged that cash will be paid back.
Cabec Ltd traded under the name of The Cream Club but ran into difficulties after a final demand was served by a creditor, which pushed it into administration.
The marketing company, which produces online videos and promotional materials for estate agents, is believed to have employed 80 people at its height.
Cabec Ltd was bought in a pre-pack deal on the day it entered administration for £50,000 by a company called Cream Club Ltd, but a letter seen by The Hunts Post shows business minister Anna Soubry has expressed concerns about the case.
One of Cabec’s former directors and its majority shareholder, Craig Cook, is a director of the new company. He was also managing director of Cream Worldwide Ltd, another estate agency marketing company which was wound up in 2014.
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Today, Mr Cook claimed Cabec had been unable to weather a steady flow of negative publicity, but reassured creditors they would be paid from the profits of the new company.
He said continuing adverse opinion online “hurts that business through lower sales and stops the tight management team from employing more local people.”
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He added: “Cream [Club Ltd] have a purchase agreement in which if we can avoid the attacks of the past then this will see continued profits and a return back to the creditors.”
He said the priority throughout Cabec’s struggles had been his employees, and claimed “so savage have been the untruths” that the company had pursued legal action against the alleged perpetrators.
Cabec voluntarily entered administration on May 5, 2015, owing unsecured creditors £944,967, including £681,000 to HMRC for VAT, tax and national insurance contributions, as well as £151,495 to staff.
The company owes a marketing agency £37,500 and its electricity supplier nearly £14,000, while its Huntingdonshire creditors include HC Solicitors, owed £1,558, St Ives Quickprint, owed £461, and Munchkins sandwich shop, owed £231.
A report sent to creditors of Cabec Ltd in June 2015 said staff hadn’t been paid last November or December and many had left, with further claims for loss of notice and redundancy expected from employees.
The joint administrators, Jamie Taylor and Lloyd Biscoe of Begbies Traynor, said they expect there to be funds for a dividend to be paid to preferential creditors - which includes staff - though unsecured creditors are not expected to receive any payment.
The report states that Cabec Ltd, based on the Compass Point business park, was “initially successful” after being incorporated in 2010, with profits of £73,815 on a turnover of £1,076,368.
But the “acrimonious departure” of one employee and disputes over entitlements with another, led to separate winding-up petitions in December 2013 and the following July. Both claims were settled.
By the spring of 2014, new sales had already “trickled to practically zero”, with clients cancelling contracts and a high turnover of staff making “survival of the business difficult”.
In September 2014, a creditor demanded the repayment of a £145,000 loan it had made to Cabec Ltd the previous December. A further loan was secured in January 2015, but that was called in and the company was placed in administration in May 2015.
Cambridgeshire Constabulary has confirmed officers looked into Cabec after receiving information from Action Fraud and the National Fraud Intelligence Bureau, but closed its investigation after concluding no criminal offences had been committed.
Have you been affected by the collapse of Cabec? Email firstname.lastname@example.org