NEW YORK — A court battle by two creditors who say Addiction Recovery Care defaulted on loans now has those two financial firms at odds with one another.
Clear Cove Opportunities Fund filed the amended complaint Feb. 27 in the U.S. District Court for the Southern District of New York against ARC, its owner Tim Robinson, and Angelica Capital Trust. Angelica had previously filed its own lawsuit against ARC in January.
The controversy centers on Employee Retention Credit refunds issued by the Internal Revenue Service for the first and second quarters of 2021.
According to Clear Cove’s complaint, the company entered into an agreement with ARC in July 2025 to purchase the rights to receive ARC’s ERC refund for the first quarter of 2021, totaling $3,319,220.80, plus 50 percent of any interest paid by the IRS. Clear Cove says it paid ARC more than $2.7 million upfront for those rights.
The agreement required ARC to forward the refund within three business days of receiving it. The lawsuit also states Robinson personally guaranteed ARC’s obligations under the deal.
In September 2025, Clear Cove says it agreed to extend ARC additional time to meet certain obligations. In exchange, ARC granted Clear Cove a secondary interest in its second-quarter 2021 ERC refund.
According to the complaint, ARC received both ERC refunds on or around Dec. 2, but never forwarded the funds to Clear Cove.
The lawsuit further alleges that after selling the refund rights to Clear Cove, ARC entered into separate agreements in November 2025 with Angelica Capital Trust, purportedly selling the same first- and second-quarter ERC refunds again.
Angelica filed its own action in the same federal court, alleging fraud and seeking to freeze ARC’s assets. In January 2026, a judge ordered approximately $4.7 million — described in court filings as nearly all of ARC’s liquid assets — to be placed in a frozen account while that case proceeds.
Clear Cove claims its interest in the funds is superior because it purchased and publicly recorded its rights before Angelica’s agreements. The company argues that if the frozen funds are distributed to Angelica, it may be unable to recover the money, particularly since the court has already noted ARC appears to be “on the brink of insolvency.”
Clear Cove is seeking at least $3.6 million in damages, 15 percent annual interest under the contract, attorneys’ fees, and a declaratory judgment establishing that it has priority over Angelica in any distribution of the restrained funds.
Clear Cove is also asking the court to grant a temporary restraining order and preliminary injunction to block the distribution of funds from the frozen account in the Angelica case, until the court determines which company has a superior claim to them.
Both cases remains pending in federal court.
Copies of the amended complaint and a memorandum of law arguing in favor of the injunction follow:
