FINANCIAL COMPANIES INVOLVED IN THE DUELING LAWSUITS AGAINST EACH OTHER AND AGAINST ADDICTION RECOVERY CARE REACH PRELIMINARY SETTLEMENT THAT POTENTIALLY COULD RESOLVE COMPETING CLAIMS AGAINST ARC
SEPTEMBER 24, 2026 – written by WADE QUEEN
The two financial companies involved in separate lawsuits against Addiction Recovery Care have reached a settlement that could resolve their competing claims to nearly $4.7 million in federal tax-refund proceeds currently being held in a court-ordered account.
Attorneys for Angelica Capital Trust and Clear Cove Opportunities Fund I notified a federal judge in New York on Friday, September 18 that they had reached an agreement involving their two lawsuits against ARC and asked the court to take several steps that would bring both cases to an end.
The proposed resolution centers on $4.7 million that has been frozen in an ARC account at Truist Bank since January 2026.
Under the agreement, the companies are asking the court to direct $3.6 million to Angelica Capital Trust and $1.1 million to Clear Cove Opportunities. The two amounts account for the entire balance of the restrained funds.
The dispute traces back to the Addiction Recovery Care sale of its anticipated Employee Retention Credit tax refunds from the Internal Revenue Service (IRS).
Clear Cove Opportunities said it entered into an agreement with ARC in July 2025 to purchase the rights to ARC’s first-quarter 2021 ERC refund, which was expected to total about $3.32 million. Clear Cove Opportunities paid ARC approximately $2.72 million for those rights and later obtained a secondary interest in ARC’s second-quarter refund.
According to the Clear Cove Opportunities lawsuit, ARC received both refunds in December 2025, but failed to turn the money over.
A separate deal was reached with Angelica capital trust in November 2025. Court filings say Angelica paid ARC and its tax preparer a combined $5.46 million in connection with agreements covering two Employee Retention Credit receivables with a face value of about $6.91 million, plus potential interest. ARC subsequently received $8.15 million from the IRS, according to Angelica Capital Trust’s court filings.
Angelica Capital Trust filed its lawsuit in January 2026 after alleging ARC failed to turn over the tax-refund proceeds. U.S. District Judge George B. Daniels found that ARC was “on the brink of insolvency” and ordered the company to place $4.7 million in a segregated account, while leaving approximately $1 million available for operating expenses. The judge also noted that ARC acknowledged withholding and spending a significant portion of Angelica Capital Trust’s funds .
Clear Cove Opportunities later followed with their lawsuit against ARC and added Angelica Capital Trust as a defendant, arguing that it already had rights to the same tax refunds. Clear Cove Opportunities sought to prevent the frozen money from being distributed until its claim to the funds was resolved. A federal judge declined to issue that preliminary injunction but allowed the dispute over ownership of the money to continue.
The new agreement would effectively settle that dispute. Clear Cove Opportunities would withdraw its claims against Angelica Capital Trust, while Angelica Capital Trust would withdraw its opposition to Clear Cove’ Opportunities request for a judgment against ARC. The parties are asking the court to approve both judgments.
The agreement also calls for Clear Cove Opportunities to obtain a judgment against ARC under Rule 54(b), while Angelica seeks confirmation of the judgment arising from its arbitration with ARC.
The settlement comes amid separate federal criminal proceedings against Addiction Recovery Care founder Timmy G. Robinson Jr. Federal prosecutors allege Tim Robinson caused ARC to sell the same Employee Retention Credits to multiple buyers. Tim Robinson was indicted in June 2026 on one count of wire fraud and two counts of money laundering.
The September 18 filing is a request for court action rather than a final order. The parties are asking Judge George Daniels to approve the judgments, dismiss Clear Cove Opportunities claims against Angelica Capital Trust and give the authorization distribution of the restrained funds.
The latest court filing does not spell out whether the settlement resolves any additional claims or financial obligations involving ARC beyond the judgments and distribution of the restrained funds.
