Cabec trading as the Cream Club went into liquidation owing its staff thousands in unpaid wages.
Yet staff get the blame for Cabec’s financial troubles in a report by the administrators.
The report blames staff who left and subsequently applied for a winding up order, and a “revolving door” of staff churn. The report does not quote staff themselves.
The firm, which offered marketing services to estate agents, appears to have been allowed by HMRC to build a debt of over £600,000 with a £468,000 shortfall in PAYE and NIC, plus a £213,000 shortfall in VAT.
Other creditors include Angels Media, owed £37,500, Avis car rental which is owed £4,237, freelance voice-over artists, two firms of solicitors, a software firm, the Royal Bank of Scotland, and recruitment firms.
In a pre-packaged sale of the business and its assets, Cabec trading as Cream Club was sold to The Cream Club for £50,000 altogether, payable in instalments.
One of those instalments, due on June 15, had not been received, with promises to pay by June 30.
Craig Cook was a director of Cabec and is a director of the purchaser, says the administrators’ report.
Their report says that “preferential claims of employees for arrears of wages, salary and holiday pay were estimated at £151,495”.
Claims of unsecured creditors were estimated at £944,967.
But, says the report: “It is further considered that substantial claims will arise in respect of employees’ claims for redundancy and compensation for loss of notice. It is uncertain at this stage what these claims will ultimately amount to.”
A sum of £50,645 is owed to a factoring firm, Factor 21, which pulled the plug by approaching administrators Begbies Traynor. Factor 21 is now financing the new business, according to the report.
The joint administrators, Jamie Taylor and Lloyd Biscoe of Begbies Traynor, say they “consider that there are likely to be sufficient funds for a dividend to be paid to preferential creditors”.
Their report says there will be insufficient funds to pay anything to unsecured creditors.
Cabec trading as the Cream Club, which was placed in administration in May after the intervention of the factoring firm, will now be wound up.
There is to be no creditors’ meeting.
The report says that Cabec trading as Cream Club was initially successful after its incorporation in December 2010.
Its director from inception was Claire Olphert; Craig Cook was subsequently appointed in March 2011.
For the year ending June 30, 2013, it achieved a turnover of £1,076,369 and had accumulated profits of £73,815.
However, the report says that staff problems followed and it goes on to fairly and squarely blame a “constant wave of anti-Cream communications”.
In December 2013, one of Cabec’s employees resigned and the report says it was an acrimonious departure. A winding up petition subsequently followed.
According to the report, “it is alleged that the company’s suppliers, creditors, landlord, staff and all clients were sent communications advising them to remove business with the company”.
Cabec, says the report, took the situation seriously and spent over £150,000 gathering intelligence to take a case against the perpetrators. However, as far as Eye understands, there has been no such case.
In July last year, another member of staff issued a winding up petition. Bibby’s Financial Services, which had lent the company £145,000, demanded repayment.
Staff were not paid last November or December and many left.
Factor 21 Invoice Financing became involved earlier this year and it was this firm that subsequently approached Begbies Traynor, triggering the administration.
Eye asked Begbies Traynor for information on debt owed to HMRC.
Insolvency administrator Lucy Sibun said: “I am unable to disclose details of [the] HMRC debt.”
The administrators’ report is here
Comments (16)
Interesting that Section 4 of the report, which describe events as taking a downward turn from 2013, seems to be a Cream-written whitewash. Events ACTUALLY began to spiral downhill from the summer of 2010, when lack of cashflow began to result in non- and minimal payment of staff – leading many to leave in the following months (and some being inexplicably “fired” – presumably to save paying them..). Many of these people tried to retrieve their monies, only to be thwarted by Craig’s remarkable wriggling (reported by the local press, accessible online). Yes, personal credit ratings, relationship breakdowns and selling of personal items (including a precious ring), began then – three years before what is claimed in this account…. which is why anger, frustration and retribution against Craig and Cream/Cabec had built up a fair head of steam by 2013 – explaining staff turnover, and attempts to shutdown Craig and all his Creamy works…
In no way were the events of 2013 sudden or unexpected. Craig had sown the seeds of all that followed in the summer of 2010. It is remarkable, extraordinary, and inexplicable that nothing seems to have changed in five years….Neither Craig’s behaviour, attitude to his staff, or bewilderment that he is actually responsible for the debacle that is Cream – and the well-deserved flak that he and his company are now experiencing. It is five years overdue….! And that it is not terminal is shocking…!!
I am appalled that there could be any notion of the idea that the Cream Club could genuinely blame staff for their financial troubles.
Although on second thoughts, it is rude to try a winding down order to obtain all the money owed to you, especially when you’ve had to borrow money off family to pay rent! And it’s even more annoying to have a constant stream of staff coming and going! I mean, who actually leaves a job as soon as they get wind that they may be duped and not paid!
During my time I was told by Claire that I was useless at my job! And I was, because after all, who wants to answer the phone to constant pressure from angry people that are owed money, or agents that have been misled by Cream. Client Performance should have been re-named ‘Client damage limitations’ department!
Anyway, I’ve since moved on to several brilliant opportunities and though the people remain some of the best I’ve worked with, the owners remain inept and abusive!
I have seen first hand (not this company) the toll it takes on employees in this position they are scared to leave if they have not been paid as they walk away from ever being paid, when a number of these employees live month to month with no savings its an awful position to be in. Its almost like legalized slavery.
I would hope any agent afflicated with Cream or the phonix pulls all advertising. I i hope HMRC and the fraud squad look into Mr Cook’s dealings.
Worthy of a call to watchdog!
I like the way he admits to not paying staff on time over 16 months and blames the attacks on people who just want their money they are owed. The reality is that some didn’t get paid for 4 months at a time and were still expected to turn up or lose their money and job.
Even during these supposed ‘attacks’, it didn’t stop Mr Cook spending over £60k on tarting up the building and ordering staff uniforms, during exactly the months that he hadn’t got the money to pay wages, or pay for the things he ordered. Then he tries a scam of getting Agents to pay for goods up-front, with no intention or ability to deliver them. Great decisions for a company director and all fraud Mr Cook !
As for the ‘revolving door of recruitment’, could this be because people wanted paying and after 3 months decided to quit and add themselves to a growing list of nearly 100 people who had left previously being owed money!!
Looking at the debts to HMRC of over £600k, Creditors of £260k+ and all the staff he owes money to, it makes you wonder where the money was going!
Finally, is it me, or in allowing Cook to buy the company and start again (for the 4th time it appears), has he actually not had to pay anything for the £1.265m worth of software that was developed and is the main production and delivery system for their products?? Shame on you Mr Administrator! Surely this was of huge value to those Creditors that you now say you have no money to distribute to? Or maybe you haven’t sold it to him and he is using it illegally, not having told you of it’s existence?
Disgraceful.
Mr Craig Cook, one really does have to ask ‘Who do you think you are’?
You didn’t pay the staff in Nov or Dec and then seem surprised that there is a backlash, I wonder if your family had a lovely, happy and fully paid for festive season without the worry of paying your fuel bills in January.
I am not a person who would usually call someone, but really you need to get a grip on the real world and admit management was to blame, one word sums it all up, DISGRACEFUL.
Not paying staff in November, December in the run-up to Christmas, with December/January bills to pay is really unforgiveable. I wonder how close to Christmas the staff got that bad news? Doubtless, after weekly assurances from Craig, that all would be well, and that people would be paid….
Such weekly meetings have been the pattern for the last five years – Craig, shinily sweating, while he told you of the company’s latest triumphs… then delivering the bad news that, since they’d had to pay HMRC, or VAT… or some other outstanding bill, there was no money in the coffers this week, and everyone would have to hang on, till some other promised loan or investment had come in (next week? Next month?)….and meanwhile, once again, cope with no salary – or the odd token £50 – £100…which goes nowhere when you have food and petrol to pay for, and your own bills to pay. Nothing apparently changes in Cream towers…. a company surviving by the seat of Craig’s pants – and his astounding ability to create a new company identity out of the debt-ridden ashes of the previous.
It’s worth studying his company start-up record, and the not-so-subtle morphing in the last few years of Cream Worldwide (!) into Cabec… and into Cream Club, the rolling name… And there’s that Coffee and Cream Club, too… Have I missed any out? I thought this constant phoenix behaviour was actually illegal…..
And… quite by the way, the idiotic adoption of the Cream name in the first place – surely one the most overused current “names” imaginable. Or was that behind the thinking? The adoption of a name which already carried some established credence? An association with quality…..?
Creative Estate Agency Marketing….? Judge that on the company’s record….. and the real focus of its creativity…
I’ve never had any dealings with Cream Club or Cabec and certainly will not do so in the future but any company that doesn’t pay its staff and/or suppliers shouldn’t be surprised if there is a backlash. Cause and effect, its as simple as that. It would be really interesting to know how much the directors, senior management etc were being paid all the time the debts were mounting. Does anyone know?
Rosalind or Property Eye why don’t we ask the Cream Club for a comment? Would be very interesting to know the above question, or possibly you have and they refused to answer?
They are still sending out Lottery tickets! They seem to be trading as normal.
I was posted about 10 national lottery tickets from these guys as some sort of incentive for me to use their company.. – Said I wasn’t interested but it was exciting to check my numbers each week.
A nice, coolly balanced account of the latest events in this interminable saga. So the management ‘”…fairly and squarely blame a “constant wave of anti-Cream communications….”’ I wonder why, Craig…? I wonder why….?
So… after all this, is the company really soldiering on now as “Cream Club?” Cleansed, renewed, and virgin white again – all these debts and justified acrimony swept under the carpet..?
I really hope not… If so, the law truly is an ass….. with no teeth…. and any notion of justice….
Staff are blamed for reacting adversely to the horrific situation dropped on them by the management?! Like no pay, for month after month? Management blames its STAFF?!! What kind of management is that?
Craig has never acknowledged that he is actually responsible for everything that has followed: immense unpaid debts, unpaid staff, unpaid suppliers – and a hopeless service to the agents he has signed up – poor websites, and really tatty, poorly voiced “videttes” with maddening sponsorship bumpers at top and tail. This is not a user-friendly service for the potential property buyer!
Then he has the gall to tell everyone, “It’s not my fault, guys, it’s yours…!” YOU let me down. YOU’RE responsible for my companies’ failures…” (!!!!)
I think it’s time you had a reality check, Craig. Take a look in the mirror. YOU’RE responsible… for everything that has followed……
How on earth they can blame the staff is beyond me
Over £1,000,000 worth of creditors (it was similar last time in 2010) and now the 4th attempt to make Cream Club a viable business by the directors!!!
The directors allowed to rack up ridiculous debts and leave people and organisations high and dry whilst they start a new (same) business debt free for the 4th time. Why is this legal???
I feel for the staff involved. Of course they will walk out and bad mouth you if you do not pay them.
Basic right for an employee to be paid on time.
If you cannot afford the staff do not take them on.
This company has left owing thousands to individuals and businesses.
Very sad story and I think from what I have heard and read down to greed and mismanagement not staff.
A shameful episode