A community interest company that won the second-ever Big Society Award from the government, has gone into liquidation owing creditors £1m.

The Create Foundation CIC was set up in 2007 to provide homeless and disadvantaged people with training and employment opportunities in the food, retail and catering industry.

Its flagship restaurant opened in Leeds City Centre in 2011 and its food was critically acclaimed.

According to the Yorkshire Evening Post, founder and former chief executive Sarah Dunwell stepped down from the business along with the rest of the board in March this year, and non-executive director Ged Syddall, who runs Warrington-based firm Elmfield Training, assumed control of the business.

Elmfield had lent Create nearly £900,000 and had to write off the debt.

Syddall had planned to relaunch the Leeds restaurant as a community learning hub but on 5 June the directors instructed insolvency experts to put the CIC into voluntary liquidation.

In its last set of accounts, for the 15-month period up to 31 January 2012, Create recorded income of almost £1.2m, a significant increase on the previous year’s turnover of £576,000. But its outgoings were almost £1.9m, resulting in a deficit of £956,000.

Its CIC report for the period stated that the organisation opened restaurants in three new cities during the year and expanded its Create Academy Programme, which offers bespoke training for people suffering from chronic social exclusion.

Partnerships with several employers meant that the enterprise was helping around 300 former rough sleepers find work each year.

In 2010, Prime Minister David Cameron gave Create the second Big Society Award, and said the organisation was a great example of the Big Society in action.