St Ives firm looks for settlement with creditors

A ST IVES firm which has left its former workers �37,000 out of pocket has called in insolvency experts.

A ST IVES firm which has left its former workers �37,000 out of pocket has called in insolvency experts.

Cream Worldwide, a web marketing company, has debts of more than �725,000. Its former employees, who say their lives have been devastated by the loss of wages, believe they will never see the money owed to them.

Cream director Craig Cook called in business recovery and insolvency experts Wilson Field in January, and has scheduled a meeting next week to offer creditors one-third of the money they are owed through a company voluntary arrangement (CVA).

The former employees have hit out at the offer, to be paid over five years, as “yet another false promise” from the company, though Mr Cook said it was the best solution for all parties.

Court proceedings against Cream, based at St Ives Business Park, have also been started by one corporate creditor which claims it is owed �28,000. Of its total debt of �726,689, Cream owes �189,034.63 to HM Revenue and Customs.

The offer to creditors is for 33.82 per cent of their claim – to be reassessed annually – which could mean Cream Worldwide writing off nearly half-a-million pounds of debt.

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Creditors will vote whether to accept the proposal, and a hearing will be conducted at the Best Western Hotel in Orton Longueville on Thursday, February 24 at 11am.

The report outlining the terms of the CVA gives details of the company’s debt, and says Cream’s assets are insufficient to meet its liabilities in full. It adds: “If the company went into liquidation, unsecured creditors would be likely to make no recovery.”

A spokesman for the former employees said they had resigned themselves to losing their money – and would be voting against the CVA.

“We know we are not going to get our money back but we want to make sure this cannot happen to anyone else again.

“The CVA is a licence to write off 70 per cent of the money we are owed. We know we are not likely to get any of it.

“Many people have run down their savings, money for which they had worked their whole lives.

“We have grown sick of the false promises of investors coming in, always another six weeks down the line.”

The lost wages have had a “devastating” effect on employees’ lives, added the spokesman.

“Some people nearly lost their homes after being promised salaries which were never paid. Others had to rely on their families and friends to prevent them being left homeless.

“It’s emotionally draining – you can’t plan anything. You don’t know when you are going to get your next payment, and so you are terrified to spend any money at all.”

Mr Cook said Cream had recently secured several “major new contracts” that would see the company get back on its feet, and that he would see voting against the CVA as “quite a selfish act”.

“We are probably going to be one of the few companies this year to be taking on staff,” he said.

“I’m very upset for [the unpaid employees]. It’s nothing malicious.

“The main thing is that the employees get what they are owed. None of the directors have taken any wages, and nobody has lost out more than me.

“The best way for the creditors to get their money back is to agree to the CVA.”