MANHATTAN — A new investor has entered the growing legal fight over Addiction Recovery Care’s finances, asking a federal judge in New York to block the release of millions of dollars currently frozen by the court.

Clear Cove Opportunities Fund I has filed a motion seeking permission to intervene in the ongoing case between Angelica Capital Trust and Addiction Recovery Care, or ARC. Clear Cove claims it already owns the rights to federal tax refunds at the center of the dispute and says those funds should not be released until ownership is sorted out.

According to court filings, Clear Cove says it purchased ARC’s rights to employee retention tax credit refunds for the first quarter of 2021 in July 2025, paying more than $3.3 million. Two months later, Clear Cove says ARC also granted it a backup claim on second-quarter 2021 tax refunds if the first refund was delayed.

Clear Cove says the Internal Revenue Service paid both refunds in early December, but ARC never turned the money over. Instead, ARC later entered into a separate deal with Angelica Capital Trust, which also claims rights to the same refunds.

Angelica sued ARC in federal court earlier this month, accusing the company of defaulting on its obligations and improperly holding onto the tax money. A judge has since ordered ARC to place about $4.7 million into a frozen account while the dispute plays out.

Clear Cove now argues that at least part of that frozen money belongs to it, not Angelica or ARC. The firm says ARC had already sold the refund rights to Clear Cove before entering into any agreement with Angelica and that Clear Cove’s ownership interest was publicly recorded through state filings.

“Clear Cove recently learned that, after ARC sold the Transferred Interests and granted the Secondary ERC Claim to Clear Cove, ARC then purported to sell Clear Cove’s property — i.e., the very same ERC refunds comprising the Transferred Interests and Secondary ERC Claim — to Petitioner Angelica Capital Trust,” Clear Cove says in a motion to intervene in Angelica’s case. “ARC is now in default on its obligations to Clear Cove and — according to Angelica — on its obligations to Angelica.”

In its motion, Clear Cove asks the court to allow it to join the case and to keep the frozen funds locked down until a judge decides who legally owns them. The company says releasing the money now could leave it unable to recover funds it claims were sold to it in a valid transaction.

“The Court should issue Clear Cove’s requested preliminary injunction because ARC and/or Angelica may, during the pendency of Clear Cove’s forthcoming breach of contract action against ARC, reach a settlement that results in the distribution of the Restrained Funds — which include the Transferred Interests and Secondary ERC Claim and represent substantially all of ARC’s liquid assets — to Angelica, leaving Clear Cove unable to recover from ARC,” the motion says.

Clear Cove also warns that ARC is financially unstable and could be pushed into bankruptcy, which it says would further complicate recovery if the funds are distributed prematurely.

Clear Cove says it is in the process of filing a separate lawsuit asserting its claim over the disputed tax receivables.

The judge has not yet ruled on Clear Cove’s request to intervene or its request for additional court orders. The case is part of a broader legal battle involving ARC’s finances, tax credits and alleged misuse of funds.

ARC was scheduled to appear in Manhattan federal court this morning for a hearing to determine whether the company and its owners should be held in contempt of court for violating a temporary restraining order by transferring money out of its bank account to its subsidiaries, after being ordered not to allow its account to dip below $10 million. ARC claims it could not comply with the order because it did not have $10 million in its account, and it had to pay necessary business expenses. Results of that hearing are not yet available.

Previous coverage of this story can be found at the following links:

• Creditor seeks to freeze Addiction Recovery Care’s finances, Jan. 22, 2026
• Judge orders freeze of nearly all ARC assets, Jan. 23, 2026
• Attorneys ask to withdraw, as ARC faces contempt hearing Thursday, Jan. 27, 2026

A copy of Clear Cove’s motion to intervene follows: