Drake sued over $4M loan to his lifestyle brand OVO

A lending company has since recalled the loan and now claims the company owes double that amount

Published Jun 24, 2026  •  Last updated 25 minutes ago  •  2 minute read

Drake watches on as the Sacramento Kings play the Toronto Raptors during the second half of their basketball game at the Scotiabank Arena on November 2, 2024 in Toronto, Ontario, Canada. Photo by Mark Blinch /Getty Images

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Drake has found himself in the middle of another legal battle – this time involving his lifestyle brand, October’s Very Own (OVO).

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OVO, founded by the rapper, his manager Oliver El-Khatib and producer Noah “40” Shebib, struck a deal last year with a Florida-based debt lending company called Applied Real Intelligence (A.R.I.), which lent the apparel company $5.2 million (US$3.7 million) via a series of convertible notes transactions, according to Billboard.

A.R.I. recalled the loan and now claims the company owes double that amount.

OVO paid back US$3.7 million in May, but ARI argued the company should pay an additional fee of $3.8 million for defaulting.

Lawsuit vs. lawsuit

On June 2, OVO filed a lawsuit in a Toronto court, asking a judge to declare that it did not have to pay the additional amount, known as a make-whole fee, according to the outlet.

“In particular, although A.R.I. alleged defaults and expressly reserved its right to accelerate, A.R.I. did not accelerate the notes prior to negotiating and entering into forbearance terms,” according to OVO’s filing, obtained by Billboard. “Repayment in the context of and pursuant to the forbearance agreement does not trigger an entitlement to a make-whole fee.”

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ARI has since countersued in a Vancouver court on June 11, demanding OVO be forced to pay the make-whole fee, arguing the amount was “designed to provide A.RI. with a minimum negotiated return and to protect A.RI. against the loss of the benefit of its bargain if the notes were repaid or otherwise terminated before maturity.”

Toronto’s Drake wears a fur coat adorned with many company logos in his new music video, Slap The City. Photo by Screenshot /YouTube/@Drake

‘Clear contractual obligations’

The lender issued a statement about the lawsuit last week, detailing how OVO “previously acknowledged existing and continuing defaults and admitted indebtedness was valid, binding, and unconditionally owing under formal forbearance agreement.”

A.R.I. said in its statement that it “approached this transaction in good faith and viewed OVO as a compelling company with substantial brand value and long-term growth potential,” pointing out that when the defaults occurred, the company “did not immediately pursue litigation.”

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“Instead, we worked extensively with OVO through a formal workout process and provided the company substantial time and flexibility to resolve the situation outside of court,” the lender said.

A.R.I. maintained that OVO failed to abide by their “clear contractual obligations” and now “intends to fully enforce its legal rights and protect its investors through the courts.”

Drake released his newest album, Iceman, last month. It remains at No. 1 on the Billboard 200 chart for the fourth consecutive week.

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