ARC has Two Creditors Battling it Out

By Roberta Cantrell
BSN Editor

Court battles are heating up involving Addiction Recovery Care (ARC) as two creditors are seeking millions of dollars owed to them by ARC who defaulted on loans causing the two firms to both be laying claims to the same recovery of money.

Both Clear Cove Opportunities Fund and Angelica Capital Trust say they were duped by Robinson when he sold both of them the same Employee Retention Credit Refunds by the IRS in exchange for loans from each company.

Clear Cove became aware of this when they heard of Angelica’s lawsuit filed in the U.S. District Court for the Southern District of New York in January against ARC for defaulting on the agreement they made concerning the IRS payment and the money they loaned Robinson.

Now both firms are at odds on who should recover their money and Clear Cove has filed an amended complaint February 27 against Robinson, ARC and Angelica Capital Trust asking for an issue of preliminary injunction enjoining the distribution of the restrained funds until Clear Cove’s ownership interest has been adjudicated.

The complaint stated Clear Clove 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 Sept. 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.

In the complaint it alleges that ARC received both ERC refunds on or around Dec. 2, but never forwarded the funds to Clear Cove.

The complaint also alleges that after selling the refund rights to Clear Cove, ARC entered into separate agreements in Nov. 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 Jan. 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.

The lawsuit stated that Clear Cove will “suffer irreparable harm unless this Court grants a preliminary injunction while Clear Cove’s interest in the Restrained Funds is adjudicated. This Angelica court action previously granted a virtually identical application by Angelica in the Angelica Action, based on evidence that ARC has minimal liquid assets and is on the brink of insolvency: “Petitioner [Angelica] has demonstrated that it will suffer irreparable harm absent a preliminary injunction freezing certain liquid assets in Respondents’ [ARC’s] possession because Respondents are ‘on the brink of insolvency.’”

Accordingly, the Angelica Action court ordered ARC to “place $4,706,872.75 in a separate bank account, segregated from the $1,000,000 reserved for daily operating expenses,” and enjoined ARC from “transferring causing to be transferred, or taking any action to transfer the $4,706,872.75 out of the segregated bank account during the pendency of this action without further order of this Court.”  There is real and substantial risk (a) that ARC will try to resolve its dispute with Angelica by transferring to Angelica the Restrained Funds, including Clear Cove’s Transferred Interests or (b) that Angelica will obtain an arbitral award against ARC before Clear Cove can obtain a judgment against it in the current action. Accordingly, by the time the Court renders its decision on Clear Cove’s claims.

When considering the interest of the public in connection with potential injunctive relief, the Court need only “confirm that granting injunctive relief would not disserve the public interest.” Here, the provisional relief sought is in the public interest. There is a strong public interest “in seeing that parties oblige by their contractual obligations and are not allowed to skirt such obligations at another’s expense.” The public interest also is served when rightful ownership is clarified, future unauthorized access to Plaintiff’s property is deterred, and other similar actors may be deterred “from engaging in the type of unlawful conduct at issue here.” In addition, Clear Cove’s interests do not even conflict with potential creditors in bankruptcy because the Transferred Interests and Secondary ERC”.

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.

No action has been taken or relief granted to either party both complaints are still pending court decision.