By Fox News
Dr. Phil McGraw鈥檚 Texas-based media company filed for bankruptcy on Wednesday and simultaneously filed a breach of contract lawsuit against business partner Trinity Broadcasting Group, which specializes in Christian programming.
Merit Street Media, which was formed in 2023 and launched Merit TV in 2024, is a joint venture of McGraw鈥檚 Peteski Productions and Trinity Broadcasting.
McGraw agreed to provide Merit Street with new episodes of his 鈥淒r. Phil Show,鈥 primetime specials and other content, while Trinity Broadcasting contributed distribution and production services, according to the lawsuit that essentially blames the Christian broadcaster for the bankruptcy.
Merit Street accused Trinity Broadcasting of reneging on its obligations and abusing 鈥渋ts position as the controlling shareholder of Merit Street to improperly and unilaterally burden Merit Street with unsustainable debt, doing so either without notice or in direct violation of promises not to do so.鈥
鈥淭his lawsuit arises out of a sad but oft told story: one side lived up to its commitments but the other, the Defendant [Trinity], did not. Moreover, these failures by [Trinity] were neither unintended nor inadvertent. They were a conscious, intentional pattern of choices made with full awareness that the consequence of which was to sabotage and seal the fate of a new but already nationally acclaimed network,鈥 the complaint, filed in conjunction with the Chapter 11 bankruptcy filing in U.S. Bankruptcy Court for the Northern District of Texas, stated.
鈥淭his fresh voice on the national stage is inexorably going dark, going off the air because TBN has refused to honor its commitment to transfer its must carry rights and thereby provide national distribution for the network鈥擬erit Street,鈥 the complaint continued. 鈥淎nd this conduct stretches beyond mere breach of contract and extends to breach of fiduciary duty and breach of the duty of good faith and fair dealing鈥攖he full extent to which may require a forensic accounting audit.鈥
Trinity 鈥渇ormed Merit Street as a joint venture and contractually committed to provide valuable services to the joint venture,鈥 according to the complaint.
鈥淏ut [Trinity] then reneged on its obligations and abused its position as the controlling shareholder of Merit Street to improperly and unilaterally burden Merit Street with unsustainable debt, doing so either without notice or in direct violation of promises not to do so,鈥 the complaint stated, noting that it owes over $100 million to third parties and that Trinity, referred to as 鈥淭BN鈥 in court documents, should be responsible.
鈥淭he most egregious impact is TBN鈥檚 conscious and knowing choice to cause Merit Street to lose its national distribution by withholding distribution payments despite repeatedly acknowledging those distribution payments were 100% TBN鈥檚 sole responsibility. Simply put, as a result of TBN鈥檚 conduct, Merit Street has nowhere to send its broadcast signal and nowhere to air its programming no matter how great it may be,鈥 the complaint stated.
Merit Street bills itself as an organization that 鈥減rovides clarity and solutions on the issues and topics that matter most to Americans,鈥 including 鈥渢raditional family content,鈥 news, sports, music, true crime and more.
The bankruptcy filing lists both estimated assets and liabilities in the $100-$500 million range. Merit Street is seeking damages, legal costs, and 鈥渇urther relief as the Court may deem just and proper.鈥
Trinity Broadcasting did not immediately respond to a request for comment by Fox News Digital.