In 2020, Megan revealed on Instagram Live that she had attempted to renegotiate her contract with 1501 Entertainment but was denied the opportunity to do so and barred from releasing her new music (her album "Suga"), according to Pitchfork. Megan sued in response, alleging her contract wasn't clear to her and that 1501 failed to "explain the full nature of the contract" when she signed it. She asked for $1 million in damages and termination of the contract.
In her lawsuit, Megan claimed her contract with 1501 splits her recording income with 60 percent going to 1501 and the remaining 40 percent going to her. However, she claimed payment for engineers, featured artists, mixers, and remixers also comes out of her cut, which greatly dips into her take. Additionally, the contract reportedly gives 1501 and Crawford exorbitant cuts out of every aspect of her business dealings, according to Pitchfork, including 50 percent of publishing, 30 percent of touring profits, 30 percent of merchandising (on top of control of all merchandising rights), and a cut of any sponsorship deals.
Crawford claimed in a statement to Billboard that while the 60/40 split on profits is accurate, Megan wasn't paying the other parties out of her cut. He also claimed 1501 never tried to block the release of her music.
Nevertheless, a Texas judge granted Megan a temporary restraining order, which allowed her to release new music and keep 1501 from threatening her on social media.