Dr. Phil’s Cable TV Network Files for Bankruptcy and Sues Christian Broadcaster TBN, Its Former Partner
Dr. Phil McGraw's Merit Street Media filed for Chapter 11 bankruptcy protection and sued former partner Trinity Broadcasting Network.
variety.com
Dr. Phil McGraw’s Merit Street Media has filed for Chapter 11 bankruptcy protection — and the TV talk-show host’s company is suing former partner Trinity Broadcasting Network, alleging breach of contract and breach of fiduciary duty.
Merit Street filed for bankruptcy and the related lawsuit naming TBN as a defendant with the U.S. Bankruptcy Court in the Northern District of Texas on Wednesday (July 2). The complaint alleges that TBN, which was Merit Street’s broadcast partner, reneged on its obligations and instead “abused its position as the controlling shareholder.” As a result, Merit Street claims in the lawsuit, it was forced to “pay or incur obligations to third parties in excess of $100 million.”
“These failures by TBN were neither unintended nor inadvertent,” Merit Street says in the lawsuit. “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.”
The “most egregious impact is TBN’s 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’s sole responsibility,” Merit Street said in the lawsuit. “Simply put, as a result of TBN’s conduct, Merit Street has nowhere to send its broadcast signal and nowhere to air its programming no matter how great it may be.”
In addition, according to Merit Street’s lawsuit, TBN’s production services were “comically dysfunctional. Although it promised the equivalent of the professional facilities and services that Dr. Phil had long relied on when producing his show in Los Angeles for CBS, the supposed ‘first class’ services TBN promised under the Joint Venture Agreement were nothing of the sort. TBN provided screens and teleprompters that blacked out during live shows, an incomplete control room operating out of a truck, an unusable cell phone app for viewers, and amateur video editing software. Merit Street staff often could not even make phone calls in the studio due to poor cell coverage.”
