Dr. Phil says two creditors of his bankrupt company Merit Street Media — Christian broadcaster Trinity Broadcasting Network and Professional Bull Riders — are trying to smear him in “incendiary” legal filings and trying to drive down Merit Street’s value. And his lawyers invoked a judge’s ruling in the Justin Baldoni-Blake Lively legal fight ordering the parties to refrain from using “disrespectful” language, saying the same directive should apply in this case.
Phil McGraw‘s Peteski Productions is the proposed debtor-in-possession lender of Merit, which filed for Chapter 11 bankruptcy protection on July 2. Merit Street also sued TBN, the company’s former distribution partner, alleging breach of contract and alleging it “abused its position as the controlling shareholder.”
In an Aug. 12 filing with the U.S. Bankruptcy Court in the Northern District of Texas, Peteski lawyers objected to the motion filed by TBN and related party TCT Ministries to dismiss Merit’s Chapter 11 case, convert it to a Chapter 7 liquidation or appoint a Chapter 11 trustee. Peteski also objected to PBR’s partial joinder in support of the TBN and TCT motion. The Peteski filing requested the court deny the TBN and PBR motions.
“From the outset of this Bankruptcy Case, both [TBN and PBR] entered into a ‘press strategy’ fueled in large part by incendiary pleadings they knew would be picked up by the media which, predictably, did occur,” Peteski’s filing says. “The effect of this is to not only insult and denigrate Peteski and Dr. McGraw but also to depress the value of the Debtor.”
In Trinity’s motion to dismiss the case, it called Merit Street’s bankruptcy filing a “sham proceeding orchestrated by one man — McGraw” and asserted that the plan was carried out “in the dead of night… designed to allow McGraw to make off like a thief.” PBR, in a motion filed last week to compel document production from Merit Street, the TKO Group-owned company said, “All evidence presently suggests that Phillip C. McGraw (‘Dr. Phil’) orchestrated this Chapter 11 Case to avoid menacing litigation against PBR and jumpstart Envoy Media Co. (‘Envoy’), a brand-new media venture he founded the day before Debtor filed this case, with the Debtor’s remaining assets free and clear of any legacy encumbrances and obligations he made on the Debtor’s behalf.”
Per Peteski’s filing: “The Motion to Dismiss and PBR Joinder are full of inflammatory and damaging assertions of bad faith, improper conduct, and self-dealing that are unfounded, speculative, and unsupported by the record.”
In a bankruptcy court hearing, Trinity’s counsel “falsely stated that Dr. McGraw created ‘zero’ episodes” for Merit Street out of a contractually obligated 160 90-minute episodes and “pocketed millions of dollars,” according to Peteski’s filing. “The evidence will show that TBN and Peteski decided to fit ‘Dr. Phil Primetime’ into a 60-minute time slot despite there being enough footage shot to accommodate the longer time period and, indeed, ‘Dr. Phil Primetime’ did stream after the initial hour was over.”
Despite Merit Street’s “early financial troubles,” from the April 2024 launch of the Merit Network through May 2025, Peteski produced and broadcast new original programing the network including 220 episodes of “Dr. Phil Primetime.” Those episodes included interviews with such public figures as President Donald Trump and Israel Prime Minister Benjamin Netanyahu, per the filing. Trinity Broadcasting, despite “having agreed to pay for this high-quality programming,” “defaulted on its obligations and now owes Peteski millions of dollars,” according to the filing.
Meanwhile, Trinity’s counsel also said during the same bankruptcy hearing that McGraw “bragged internally about his ‘gangster move’ to take over” Merit Street. “The evidence will show that this statement was made by misrepresenting an email [from Dr. Phil] which TBN improperly and illegally accessed off its server which it was hosting for the Debtor as part of its contractually obligated services under the Joint Venture Agreement,” according to Peteski’s filing. (Dr. Phil’s lawyers don’t provide context for his “gangster move” comment.)
According to Peteski’s filing, Merit Street’s “corporate actions and decisions were taken in full compliance
with Texas law and its corporate by-laws. The decision to declare bankruptcy was far from being a ‘sham’ and was instead a painful decision after much sweat equity had been invested into the Merit Network journey and brand development by Dr. McGraw.”
According to Dr. Phil’s lawyers, “Peteski, having been deprived of a platform for ‘Dr. Phil Primetime’ and other programming, is in the process of rebuilding a network from the ground up. That network will be called Envoy. The suggestion that this was Peteski’s preferred way of proceeding is belied by the facts.” Peteski Productions invested almost $50 million “in an effort to save the Merit Network,” according to the filing. In addition, when Trinity obtained a continuance of the final debtor-in-possession financing hearing that would have approved a loan to allow the payment of Merit’s employees for their pre-bankruptcy work, “Peteski itself wrote checks totaling almost $1,000,000 so these workers, many of whom were in dire need of the money, would get paid,” the filing says.
Peteski’s lawyers requested the court issue a “Dondi” instruction to parties in the case, a reference to a decision in 1988 case Dondi Properties Corp. v. Commerce Sav. & Loan Assoc. that “set out standards of conduct for lawyers and litigants” in the U.S. District Court for the Northern District of Texas.
In addition, Dr. Phil’s lawyers say, the court should “admonish all parties and their counsel to adhere to an order” similar to the one U.S. District Judge Lewis J. Liman entered in the case between actors Blake Lively and Justin Baldoni. In that proceeding, Judge Liman ordered in part that “All individuals filing documents in this case… are advised that they should not in any submission to this Court use language that is disrespectful of the parties, their counsel or the Court.”
Peteski’s filing claims that to date there are roughly 700,000 subscribers on the MeritTV app, and “its platform could be very attractive either on its own or in combination with another investor/buyer. The actions of Trinity and PBR have been aimed to destroy that value.”
The company’s filing concludes: “Peteski urges the Court to decide the pending Motion to Dismiss, and PBR Joinder, and any responses thereto as expeditiously as its schedule will permit. Justice delayed is justice denied. In this case, unfortunately, delayed justice will be a death sentence for the Debtor.”
