{"id":95232,"date":"2025-08-19T21:14:08","date_gmt":"2025-08-19T21:14:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/95232\/"},"modified":"2025-08-19T21:14:08","modified_gmt":"2025-08-19T21:14:08","slug":"tbn-sues-dr-phil-alleging-fraudulent-scheme-with-merit-street","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/95232\/","title":{"rendered":"TBN Sues Dr. Phil, Alleging ‘Fraudulent Scheme’ With Merit Street"},"content":{"rendered":"

\n\tTrinity Broadcasting Network<\/a>, former business partner of Dr. Phil<\/a>\u2019s now-bankrupt Merit Street Media<\/a>, filed a counterclaim against the TV personality \u2014 alleging he engaged in a scheme to \u201cfleece\u201d the Christian broadcasting company and \u201cenrich\u201d himself and \u201chis associates and affiliates.\u201d<\/p>\n

\n\tMerit Street Media, formed as a joint venture between TBN and Phil McGraw<\/a>\u2019s Peteski Productions,\u00a0filed for Chapter 11 bankruptcy protection<\/a>\u00a0on July 2, 2025. Concurrently, Merit Street\u00a0sued TBN, alleging breach of contract and claiming it \u201cabused its position as the controlling shareholder.\u201d<\/p>\n

\n\tTBN, in its countersuit filed Tuesday (Aug. 19) in U.S. Bankruptcy Court in the Northern District of Texas, named as defendants McGraw and Peteski, which is the proposed debtor-in-possession lender of Merit. Trinity Broadcasting accused McGraw and Peteski of fraudulent inducement and breach of contract. A copy of the complaint is at this link<\/a>.<\/p>\n

\n\t\u201cThe response to TBN legitimately and lawfully defending itself from Peteski and McGraw\u2019s bad-faith attacks is to cry foul because they do not like the true facts that they themselves now regretfully put at issue before this Court, revealing McGraw\u2019s true illicit intent and wrongful conduct which he self-described as a \u2018gangster move\u2019 and as \u201811th-hour poker,\u2019\u201d Trinity said in the complaint.<\/p>\n

\n\tSEE ALSO: Dr. Phil Fires Back at His Bankrupt Company\u2019s Legal Foes, Accusing TBN and PBR of \u2018Inflammatory and Damaging\u2019 Attacks Aimed at Depressing Value of Merit Street<\/a><\/p>\n

\n\tTBN said Peteski and McGraw engaged in a \u201cyears-long fraudulent scheme that they developed and executed to fleece TBN, a not-for-profit corporation, to enrich McGraw, his associates and affiliates. TBN is confident that the truth will set it free, and result in Peteski and McGraw being held accountable for their reprehensible conduct.\u201d<\/p>\n

\n\tReached by Variety, a rep for McGraw did not provide immediate comment on TBN\u2019s lawsuit.<\/p>\n

\n\tAccording to TBN, in 2022, McGraw sought to strike a deal with Trinity as a potential network to replace CBS as a producing and distribution partner for the \u201cDr. Phil Show.\u201d<\/p>\n

\n\t\u201cMcGraw specifically represented to TBN that he wanted to change networks because of what he perceived to be CBS\u2019s censorship of the content aired on the \u2018Dr. Phil Show,’\u201d TBN\u2019s complaint said. \u201cAs McGraw put it, \u2018I don\u2019t want snot-nose lawyers telling me what I can and can\u2019t say on TV.\u2019\u201d<\/p>\n

\n\tOn Jan. 10, 2023, TBN entered into a binding letter of intent with Peteski to create Merit Street Media and paid McGraw\u2019s company $20 million on Jan. 12. Under the agreement, Merit Street was owned 70% by TBN and 30% by Peteski.<\/p>\n

\n\tHowever, according to TBN, Peteski had misrepresented to Trinity that \u201cCBS was selling out the advertising inventories for the \u2018Dr. Phil Show’\u201d and that the new programming McGraw would create for TBN would be 90-minute shows, rather than the then-current 60-minute shows, in order to increase overall ad revenue through the longer show format. Moreover, Peteski told TBN that the then-current $68 million annual production costs for the \u201cDr. Phil Show\u201d would be reduced by at least 40% by moving all related production activities from California to Texas and not bringing any current personnel associated with show to Texas, as well as \u201celiminating unionized employees and benefits and reducing overall headcount,\u201d among other cost-saving measures.<\/p>\n

\n\tAccording to TBN\u2019s suit, \u201ceven though McGraw had previously represented that he would substantially reduce production costs by eliminating all the high union salaries of the then-existing \u2018Dr. Phil Show\u2019 personnel and would use TBN personnel or hire local Texans, McGraw instead caused Merit Street to hire dozens of existing employees from the \u2018Dr. Phil Show\u2019 whom he claimed were \u2018essential.’\u201d By May 2023, McGraw\u2019s \u201cessential\u201d employees numbered at least 30 individuals, \u201cmany of whom were pre-existing union-based employees who were paid California union-based compensation and expected comparable union-type hours and benefits,\u201d the Trinity lawsuit said.<\/p>\n

\n\tPer the agreement forming the joint venture, TBN would provide production and distribution services to Merit Street. In return, Peteski was obligated to provide \u201cnew content,\u201d including \u201c160 (90 minute) new, topical episodes of the show \u2018Dr. Phil\u2019 (the \u2018Show\u2019) delivered over 24-27 production weeks, as needed,\u201d according to the TBN complaint. \u201cFor that, McGraw (through Peteski) would receive a whopping $50 million per year for ten years \u2014 a total of $500 million, if (and only if) Peteski and McGraw performed.\u201d<\/p>\n

\n\tBy June 2024, however, Peteski and McGraw \u201chad not produced a single 90-minute episode, let alone the 160 episodes required by the [contract], and based on its production schedules, apparently had no intent to produce the \u2018new content\u2019 required under the [contract] in the remaining weeks on the production calendar,\u201d the TBN lawsuit alleged. \u201cIn an effort to shift blame for their failures to TBN, Peteski and McGraw accused TBN of breaching its obligations under the [contract] and not providing Peteski and McGraw with the resources they needed to produce content for Merit Street.\u201d In addition, McGraw refused to allow Merit Street to air old episodes of the \u201cDr. Phil Show,\u201d which TBN said it had asked him to do in an effort to \u201ckeep programming costs down and capture McGraw\u2019s previous viewer base.\u201d<\/p>\n

\n\tPeteski, in filing last week<\/a> opposing motions made by TBN and Professional Bull Riders \u2014 Merit Street\u2019s largest creditor with a\u00a0$181 million debt claim<\/a> \u2014 disputed TBN\u2019s claim that McGraw failed to produce any of the promised episodes of\u00a0\u201cDr. Phil Primetime\u201d under the JV agreement. \u201cThe evidence will show that TBN and Peteski decided to fit \u2018Dr. Phil Primetime\u2019 into a 60-minute time slot despite there being enough footage shot to accommodate the longer time period and, indeed, \u2018Dr. Phil Primetime\u2019 did stream after the initial hour was over,\u201d Peteski said in the filing.<\/p>\n

\n\tFollowing the launch of Merit TV in April 2024, \u201cit became clear that McGraw and Peteski could not deliver the viewership numbers, product integrations, or advertising revenues they previously promised to TBN. TBN expressed its disappointment with the lack of viewership, product integrations, and advertising to Peteski and McGraw,\u201d TBN said in the lawsuit. \u201cIn fact, McGraw apparently never made any introductions to the advertisers and product integrators that he had claimed would follow him wherever he went. When confronted about the lack of viewership, product integration, and advertising issues, McGraw admitted that his team had failed to live up to what was represented and expected and assured TBN that his team would make a better effort going forward.\u201d<\/p>\n

\n\tMeanwhile, despite TBN \u201cmaking its full library of content available\u201d to be used to fill Merit Street\u2019s 24-hour broadcast schedule as needed, \u201cMcGraw and\/or the management team hired at McGraw\u2019s direction rejected most of the TBN programming,\u201d Trinity\u2019s suit alleged. McGraw and Peteski \u201cinstead insisted that Merit Street enter into expensive distribution deals with McGraw\u2019s friends,\u201d including Steve Harvey, Nancy Grace, Chris Harrison and Lauren Zima, \u201cto TBN\u2019s (and Merit Street\u2019s) detriment,\u201d per the complaint.<\/p>\n

\n\tBy the end of June 2024, TBN had spent more than $100 million on Merit Street, which included building out and expanding studio facilities and office space \u2014 and a helipad \u2014 in Fort Worth, Texas, for McGraw\u2019s use, according to the lawsuit. The TBN expenses \u201chad to be recorded as loans\u201d to the company because \u201cneither Peteski nor McGraw had contributed anything of value for Peteski\u2019s 30% ownership interest,\u201d per the Trinity lawsuit. TBN continued funding Merit Street\u2019s operations at the rate of $9 million to $13 million per month (recorded as additional loans) \u201cunder Peteski\u2019s and McGraw\u2019s direction and management (or lack thereof),\u201d the suit said.<\/p>\n

\n\tOn Aug. 1, 2024, TBN informed McGraw that it would be amenable to increasing Peteski\u2019s ownership share in Merit Street from 30% to 70% (thereby decreasing TBN\u2019s ownership share from 70% to 30%) subject to the parties addressing \u201ca multitude of outstanding deal points to be finalized,\u201d per TBN\u2019s lawsuit. But \u201cMcGraw never intended to perform any steps beyond the initial stock swap,\u201d according to the complaint. \u201cIndeed \u2014 unbeknownst to TBN \u2014 McGraw described his plan on August 3, 2024, as a \u2018gangster move\u2019 to reduce TBN to nothing more than \u2018a passive minority investor role\u2019 in Merit Street,\u201d according to the TBN suit. (In Peteski\u2019s Aug. 12 filing with the bankruptcy court, McGraw\u2019s lawyers said the \u201cgangster move\u201d statement \u201cwas 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\u201d under the JV agreement; the lawyers did not provide context for the \u201cgangster move\u201d comment.)<\/p>\n

\n\tWith its cash reserves \u201cdepleted\u201d by its funding of Merit Street, TBN listed its company airplane for sale in November 2024 for $17 million to raise money to fund its own business needs and reduce its own overhead. TBN had not yet sold the plane as of February 2025; according to Trinity\u2019s lawsuit, McGraw claimed he could take the plane, sell it and provide funds to fund Merit Street. \u201cIn yet another artificially rush \u2018deal,\u2019 McGraw convinced TBN to \u2018sell\u2019 the airplane to Peteski,\u201d the suit alleged. \u201cAs soon as McGraw thought the deal was in hand, rather than converting the airplane to cash, he filed a flight plan to use the airplane to travel to New Orleans that week, presumably to attend the Super Bowl.\u201d To TBN\u2019s knowledge, \u201cthe aircraft has never been sold and is still in a McGraw-controlled company in Europe,\u201d according to the broadcasting company\u2019s suit.<\/p>\n

\n\tMerit Street\u2019s Chapter 11 bankruptcy filing last month \u201ccame as a surprise to TBN because it still controlled two of the three directors on Merit Street\u2019s board\u201d and had not approved the bankruptcy petition, the broadcaster said in the complaint.<\/p>\n

\n\tPeteski and McGraw formed a new company, Envoy Media Co., which was incorporated in Delaware one day before Merit Street filed for bankruptcy, according to TBN\u2019s suit. \u201c[D]uring the same time they were allegedly negotiating with TBN to restructure Merit Street, McGraw and Peteski were making plans to create a new company, Envoy, to replace Merit Street,\u201d the Trinity lawsuit said. The day after Merit Street filed the Chapter 11 case, all but six of the remaining Merit Street employees were laid off; meanwhile, \u201cTBN has reason to believe that former Merit Street employees and contractors are performing services for Envoy,\u201d the lawsuit alleged.<\/p>\n

\n\tIn its complaint, TBN seeks unspecified monetary damages, as well as a rescission of its deal with McGraw\u2019s Peteski and the stock amendment. In addition, the company asks for declarations that TBN\u2019s designated Merit Street board members, Matthew Crouch and Samuel Smadja, were \u201cproperly appointed to Merit Street\u2019s board of directors\u201d; that \u201cMcGraw and\/or Peteski lacked the authority to remove\u201d them from the board; and that, as such, the court issue a permanent injunction ordering Crouch and Smadja be restored to their positions on the board.<\/p>\n","protected":false},"excerpt":{"rendered":"Trinity Broadcasting Network, former business partner of Dr. Phil\u2019s now-bankrupt Merit Street Media, filed a counterclaim against the…\n","protected":false},"author":2,"featured_media":95233,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[54],"tags":[9666,88,52982,64466,92],"class_list":{"0":"post-95232","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-tv","8":"tag-dr-phil","9":"tag-entertainment","10":"tag-phil-mcgraw","11":"tag-trinity-broadcasting-network","12":"tag-tv"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/95232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=95232"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/95232\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/95233"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=95232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=95232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=95232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}