Former Dr. Phil snow-bankrupt Merit Street Media business partner Trinity Broadcasting Network filed a complaint against the TV personality, claiming that he conspired to defraud the Christian broadcasting corporation and profit himself and his affiliates.
On July 2, 2025, Phil McGraw’s Peteski Productions and TBN jointly founded Merit Street Media, which filed for Chapter 11 bankruptcy protection. At the same time, Merit Street filed a lawsuit against TBN, saying that it had violated the terms of the agreement and abused its power as the majority shareholder.
TBN identified McGraw and Peteski, Merit’s prospective debtor-in-possession lender, as defendants in their countersuit, which was filed Tuesday, August 19, in the U.S. Bankruptcy Court in the Northern District of Texas.
McGraw and Peteski were charged by Trinity Broadcasting with breach of contract and false inducement. The complaint can be found at this link.
In response to TBN’s legitimate and legal defense of itself against Peteski and McGraw’s bad-faith attacks, Trinity said in the complaint that they are yelling foul because they do not like the facts that they regrettably brought before this Court, which expose McGraw’s actual illegal intent and wrongdoing, which he self-described as an 11th-hour poker move and a gangster move.
According to TBN, Peteski and McGraw created and carried out a multi-year fraudulent operation to defraud the non-profit organization TBN in order to enrich McGraw, his acquaintances, and affiliates. TBN has faith that the truth will free it and lead to Peteski and McGraw being held responsible for their despicable actions.
“TBN’s latest lawsuit is full of proven lies and is part of a lawfare litigation strategy designed to divert people’s attention so no one notices when TBN is ultimately held accountable for walking away from its commitments here,” a representative for McGraw’s Peteski Productions told Variety in a statement. They say that we didn’t produce any episodes, among other things. The truth is revealed by a quick look at IMDb: we produced almost 200 episodes. Due to TBN’s poor behavior, many lost their employment and Peteski Productions suffered damages totaling millions of dollars. In this situation, we will not give up on pursuing justice.
TBN claims that in 2022, McGraw attempted to negotiate with Trinity as a possible network to take CBS’ role as the Dr. Phil Show’s producer and distributor.
According to TBN’s complaint, McGraw directly told them that he wanted to switch networks because he believed CBS was censoring the Dr. Phil Show’s content. I don’t want snotty lawyers telling me what I can and can’t say on television, as McGraw stated.
TBN paid McGraw’s business $20 million on January 12 and signed a legally binding statement of intent with Peteski to establish Merit Street Media on January 10, 2023. According to the deal, Peteski owned 30% of Merit Street and TBN owned 70%.
In order to boost overall ad revenue through the longer show format, TBN claims that Peteski had deceived Trinity into believing that CBS was selling out the Dr. Phil Show’s advertising inventories and that McGraw would develop new programming for TBN that would consist of 90-minute shows instead of the then-current 60-minute shows.
Furthermore, Peteski informed TBN that, among other cost-cutting measures, the Dr. Phil Show’s then-current $68 million annual production costs would be lowered by at least 40% by relocating all related production activities from California to Texas, avoiding the relocation of any current show personnel, and reducing the overall headcount.
As per TBN’s lawsuit, McGraw forced Merit Street to hire dozens of Dr. Phil Show employees he claimed were necessary, despite having previously stated that he would use TBN staff or hire local Texans and drastically cut production costs by doing away with all the high union salaries of the then-existing Dr. Phil Show employees.
According to the Trinity lawsuit, McGraw’s vital employees numbered at least thirty by May 2023, many of them were already union-based workers who received California union-based pay and were entitled to similar union-style hours and benefits.
According to the terms of the joint venture agreement, TBN would supply Merit Street with production and distribution services.
According to the TBN complaint, Peteski was required to supply new content in exchange, including 160 (90 minute) fresh, topical episodes of the show Dr. Phil (the Show) that were supplied over 24-27 production weeks.
If (and only if) Peteski and McGraw performed, McGraw (via Peteski) would get a staggering $50 million year for ten years, for a total of $500 million.
However, the TBN lawsuit claimed that by June 2024, Peteski and McGraw had not produced even one 90-minute episode, let alone the 160 episodes mandated by the [contract], and that they had no intention of producing the new content required by the [contract] in the remaining weeks on the production calendar based on its production schedules.
Peteski and McGraw accused TBN of violating the [contract] and failing to give them the resources they required to create material for Merit Street in an attempt to place the burden for their shortcomings on the broadcaster.
Additionally, McGraw denied Merit Street access to earlier Dr. Phil Show programs, something TBN said it had requested he do in an attempt to save programming expenses and attract McGraw’s former audience.
TBN’s contention that McGraw did not produce any of the anticipated Dr. Phil Primetime programs under the JV agreement was contested by Peteski, who infiltrated last week to oppose motions made by TBN and Professional Bull Riders, Merit Street’s largest creditor with a $181 million debt claim.
Despite having adequate material shot to support the longer time period, the evidence will demonstrate that TBN and Peteski chose to cram Dr. Phil Primetime into a 60-minute time slot. In fact, Dr. Phil Primetime did stream after the first hour ended, according to Peteski’s motion.
It became evident after Merit TV’s April 2024 launch that McGraw and Peteski were unable to meet their prior commitments to TBN regarding viewership, product integrations, and advertising revenue.
According to the lawsuit, TBN told Peteski and McGraw how disappointed it was by the lack of advertising, product synergies, and viewership.
It appears that McGraw never introduced himself to the product integrators and advertisers he stated would follow him wherever. When questioned about the low viewership, problems with product integration, and advertising, McGraw acknowledged that his team had fallen short of expectations and promised TBN that they will do more in the future.
Trinity’s lawsuit claimed that McGraw and/or the management team he recruited rejected the majority of the TBN programming, even though TBN made its entire library of content available to be used to fill Merit Street’s 24-hour broadcast schedule as needed.
Instead, to the detriment of TBN (and Merit Street), McGraw and Peteski urged that Merit Street sign costly distribution agreements with McGraw’s buddies, such as Steve Harvey, Nancy Grace, Chris Harrison, and Lauren Zima.
According to the lawsuit, TBN spent over $100 million on Merit Street by the end of June 2024, which included constructing and enlarging office space and studio facilities, as well as a helipad, for McGraw’s use in Fort Worth, Texas.
According to the Trinity complaint, neither Peteski nor McGraw had made any valuable contributions for Peteski’s 30% ownership stake, hence the TBN spending had to be documented as loans to the business.
According to the lawsuit, TBN continued to fund Merit Street’s operations at a pace of $9 million to $13 million per month (reported as additional loans) under the administration and guidance of Peteski and McGraw—or lack thereof.
According to TBN’s lawsuit, on August 1, 2024, TBN told McGraw that it would be open to raising Peteski’s ownership stake in Merit Street from 30% to 70% (reducing TBN’s ownership stake from 70% to 30%) as long as the parties resolved a number of unresolved deal points.
However, the complaint claims that McGraw never meant to take any further action after the original stock transfer.
According to the TBN lawsuit, McGraw did, in fact, characterize his August 3, 2024, plan as a mafia effort to reduce TBN to nothing more than a passive minority investor role in Merit Street, without TBN’s knowledge.
(The gangster move statement was made by misrepresenting an email [from Dr. Phil] that TBN illegally and improperly accessed off its server that it was hosting for the Debtor as part of its contractually obligated services under the JV agreement, according to McGraw’s attorneys in Peteski’s August 12 bankruptcy court filing; the attorneys did not provide context for the gangster move comment.)
Since funding Merit Street had depleted its cash reserves, TBN decided to sell its company airplane for $17 million in November 2024 in order to raise money for its own operations and cut expenses.
As of February 2025, TBN had not yet sold the aircraft; in the lawsuit filed by Trinity, McGraw asserted that he might take the aircraft, sell it, and use the proceeds to finance Merit Street.
According to the lawsuit, McGraw persuaded TBN to sell the aircraft to Peteski in yet another fabricated hasty transaction.
McGraw filed a flight plan to utilize the aircraft to travel to New Orleans that week, most likely to attend the Super Bowl, instead of turning the aircraft into cash as soon as he believed the purchase was finalized.
According to TBN’s lawsuit, the aircraft has never been sold and is currently owned by a McGraw-controlled firm in Europe.
According to the broadcaster’s complaint, TBN was taken aback by Merit Street’s Chapter 11 bankruptcy filing last month as it still maintained authority over two of the three members on the board and had not granted approval for the bankruptcy petition.
According to TBN’s lawsuit, Peteski and McGraw established a new business, Envoy Media Co., which was founded in Delaware the day before Merit Street declared bankruptcy. [D]According to the Trinity complaint, McGraw and Peteski were planning to start a new business called Envoy to take the place of Merit Street at the same time they were reportedly negotiating with TBN to reorganize Merit Street.
The day after Merit Street filed the Chapter 11 case, all but six of the remaining Merit Street employees were laid off; meanwhile, TBN has reason to believe that former Merit Street employees and contractors are performing services for Envoy, the lawsuit alleged.
TBN’s complaint requests the stock change, the revocation of its agreement with McGraw’s Peteski, and unspecified monetary penalties.
Furthermore, the business requests confirmation that Matthew Crouch and Samuel Smadja, TBN’s designated Merit Street board members, were duly appointed to Merit Street’s board of directors, that McGraw and/or Peteski lacked the power to remove them from the board, and that the court should issue a permanent injunction directing Crouch and Smadja to return to their board positions.
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