Issues Unfold in the Case Against ARC; Robinson’s Attorneys Are Permitted to Leave the Case

By Roberta Cantrell
BSN Editor

Financial woes are mounting and what seemed like an already difficult lawsuit between a creditor and a client took an interesting turn for what was once known as one of the largest addiction recovery centers.

Addiction Recovery Care (ARC) was paid approximately 4.8 million by Angelica Capital Trust, in November, 2025 to purchase the rights to tax credits that ARC qualified for through the IRS.  An additional expense of $700 thousand in work was also to be paid by Angelica to a company for professional services according to documents submitted in the lawsuit.

This was a purchase of the rights to specific tax credit refunds and the understanding would be these refunds would be received by ARC from the IRS and then immediately turned over to Angelica once they arrived.

However, Angelica alleged that ARC did not forward the tax refunds when received as contractually agreed and apparently, began spending the money, prompting the lawsuit.

Judge Daniels agreed to issue a preliminary injunction, instructing ARC to move $4.7 million of its remaining money into a separate, frozen bank account, prohibiting the company from transferring any money out of it. That left ARC $1 million for payment of business expenses, which was expected to last the company until Feb. 4.

However, a new company, Clear Cove Opportunities Fund, has entered the stage and has filed a motion stating they are seeking permission to intervene in the ongoing case between Angelica and ARC stating they already own the rights to the same tax receivables and they believe that money should not be awarded to Angelica until ownership is sorted out.

According to court filings, Clear Cove Opportunities Fund, a Chicago based firm, says it purchased ARC’s rights to the same 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 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.”

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.

The Robinson’s Attorneys, Eddy Salcedo and Torrey Kaufman Young with the law firm Schlam, Stone, & Dolan, have since filed a motion asking to be withdrawn from the case stating “Following the hearing that took place on January 21, 2026, my colleague, Mr. Salcedo, and I became aware that our clients were insistent upon taking actions with which we have a fundamental disagreement,” Young wrote in her filing. “In addition, the clients failed to cooperate in the representation and rendered the representation unreasonably difficult for Mr. Salcedo and me to carry out our employment effectively.”

Judge Daniels issued an order reinforcing his decision that ARC is not to permitted to transfer any funds from the segregated account

He has ordered the bank, Truist, not to allow any transfers without a court order while the case remains pending.

He also ordered ARC to provide Angelica’s attorneys with the account balance each business day, “to ensure the funds have not been dissipated.”

The judge also has not taken action on a motion from Clear Cove Opportunities Fund I, to intervene in the case who argue that ARC sold them the same tax credits that the company had sold to Angelica.

A show cause hearing was scheduled for January 29 in the US District Court Southern District of New York after what was called by Angelica a “civil contempt” that money was frozen and was dispersed to several subsidiaries, making all those businesses responsible to Angelica for now being respondents in the lawsuit.

Robinson said that was an automatic withdrawal for payroll, utilities etc. and was not intentional.

Angelica asked in a motion that ARC be held in contempt and that all subsidiaries not only be named in the lawsuit but produce Angelica with all bank records respecting any account held by any respondent relating to the months of December and January within one week. That court date was rescheduled until February 11.  

On February 2, a previous motion for ARC’s attorney to withdraw was granted.  The court order states in part, “It is hereby stipulated and agreed, by and between the undersigned, that the law firm of Schlam, Stone & Dolan LLP shall be substituted as counsel of record for the respondents (ARC) in this matter and that Seyfarth Shaw LLP hereby withdraw as counsel of record.”