A.R.I. OVO Growth Capital I, LLC (“A.R.I.”), has commenced litigation in the Supreme Court of British Columbia against October’s Very Own ULC (“OVO”), the lifestyle, apparel, and entertainment company co-founded by Aubrey “Drake” Graham, Oliver El-Khatib, and Noah “40” Shebib, and led by Chief Executive Officer Derek “Drex” Jancar.
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The litigation seeks recovery of approximately $4.6 million allegedly currently due and owing, together with contractual default interest, legal fees, lender expenses, enforcement costs, and additional amounts continuing to accrue under the governing financing agreements.
Overview of the Litigation
The litigation arises from a series of institutional financing transactions entered into between A.R.I. and OVO during 2025 after OVO sought external growth capital as part of its broader financing strategy. During 2025, A.R.I. provided financing through multiple separate transactions, including a senior secured credit facility in May 2025 and five separate convertible promissory notes issued between July and August 2025 with aggregate principal of approximately $5.2 million.
At origination, A.R.I. viewed OVO as an attractive institutional credit opportunity supported by a globally recognized consumer brand, substantial enterprise value potential, and carefully negotiated creditor protections designed to protect investor capital while supporting the company’s long-term growth initiatives.
OVO’s Default Under the Financing Agreements
According to the filed complaint, OVO subsequently defaulted under the governing financing agreements after failing to make required payments and breaching additional contractual obligations. On February 27, 2026, A.R.I. delivered a formal Notice of Default after multiple contractual Events of Default had occurred and were continuing under the financing documents.
Rather than immediately pursuing enforcement remedies, A.R.I. elected to work constructively with OVO and pursue an out-of-court resolution designed to provide the company with time and flexibility to resolve the defaults.
OVO’s Formal Forbearance Agreement and Written Acknowledgment of Debt
On March 20, 2026, A.R.I. and OVO entered into a formal Forbearance Agreement as part of that workout process.
Under the terms of the Forbearance Agreement, OVO expressly acknowledged that existing defaults had occurred and were continuing. OVO further acknowledged and agreed that all indebtedness and obligations payable under the financing agreements were valid, binding, and unconditionally owing to A.R.I. without any right of set-off, defense, counterclaim, deduction, reduction, or other basis for non-payment.
The complaint further alleges that OVO expressly agreed that A.R.I. had not waived, and did not intend to waive, any rights arising from those defaults.
A.R.I. relied on these written acknowledgments in continuing to work cooperatively with OVO rather than immediately initiating formal legal proceedings.
OVO’s Partial Repayment and Remaining $4.6 Million Owed
On May 27, 2026, A.R.I. received a wire payment of approximately USD $3.8 million. According to the complaint, however, this payment represented only a partial repayment of the total amounts owed under the financing agreements.
The complaint further alleges that the payment did not originate directly from OVO. Rather, the wire was transmitted from an account identified as “ADG Sound Inc. Management Account” and referenced “OVO NOTES.”
Despite this partial payment from a third-party, substantial contractual obligations remain outstanding.
According to the complaint, OVO has now taken the position that it owes nothing further notwithstanding the prior written acknowledgments contained in the Forbearance Agreement. A.R.I. disputes that position and alleges that approximately $4.6 million remains contractually due and owing, including make-whole obligations, accrued default interest, legal fees, lender expenses, and related enforcement costs.
OVO’s Broader Financial Context Referenced in the Complaint
The filed complaint references financial information provided by OVO during the financing process indicating that OVO generated approximately $72 million in revenue during 2024 while sustaining approximately $12 million in cumulative losses between 2022 and 2024.
The complaint further alleges that OVO was simultaneously pursuing a $30 million equity financing transaction and that Drake, Oliver El-Khatib, and Noah Shebib had personally guaranteed obligations under an existing Royal Bank of Canada credit facility, with one objective of the contemplated capital raise being repayment of approximately $10 million of existing indebtedness and release of those personal guarantees.
OVO’s Reported Strategic Transaction With Authentic Brands Group
Recent public reporting has indicated that OVO is engaged in discussions involving a potential transaction under which Authentic Brands Group may acquire a 50 percent ownership stake in the business.
Under the governing financing documents, OVO was contractually required to provide A.R.I. with ongoing financial reporting, material business updates, and notice regarding certain strategic corporate developments.
According to A.R.I., none of the reported negotiations involving Authentic Brands Group were disclosed despite OVO’s continuing contractual reporting obligations under the financing agreements.
Statement from A.R.I.
A.R.I. approached this transaction in good faith and viewed OVO as a compelling company with substantial brand value and long-term growth potential. When defaults occurred, A.R.I. did not immediately pursue litigation. 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.
OVO subsequently acknowledged both the defaults and the debt in writing under a formal forbearance agreement, made only a partial payment, and has now taken the position that millions of dollars remain unpaid despite clear contractual obligations. A.R.I. intends to fully enforce its legal rights and protect its investors through the courts.
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