Text messages unveiled during discovery in the contentious legal battle involving Merit Street Media reveal executives of the Dr. Phil McGraw-led company attempting to conceal a bankruptcy “scheme” in order to shift assets and staff over to a new media venture, according to recent court filings.
A week after Trinity Broadcasting sued Merit Street and Dr. Phil for conducting a “years-long fraudulent scheme” in an effort to “fleece TBN” in a scuttled $500 million deal, the Christian broadcaster filed an emergency motion seeking sanctions against Dr. Phil’s production company Peteski Productions for failing to produce discovery material in Merit’s bankruptcy case.
TBN was joined in the motion by Professional Bull Riders, the TKO-owned sports league that claims Merit Street owes it $181 million after reneging on a four-year deal by failing to make payments. In its separate joinder filing, PBR included text messages from Merit Street’s chief operating officer Joel Cheatwood that it claims prove Merit Street and Dr. Phil orchestrated the bankruptcy as part of a plot to launch a new media company.
“The documents produced to date demonstrate that this bankruptcy was conceived as a scheme to divert the Debtor’s employees and intellectual property to Envoy, a competing business Dr. Phil founded the day before this case was filed, and leave the Debtor’s business as a shell with nothing more than a repeated loop of re-runs,” PBR’s attorneys stated in its filing late Tuesday evening.
This latest flare-up in the dramatic legal drama comes less than two months after Merit Street filed for bankruptcy barely a year after the “anti-woke” cable channel launched, while simultaneously suing its distribution partner TBN for allegedly trying to “sabotage and seal the fate of a new but already nationally acclaimed network.”
While Merit has insisted that it was left $100 million in debt by Trinity Broadcasting, the Christian media giant has fired back and accused Dr. Phil and accused him of “reprehensible conduct” by creating a “false sense of urgency” in order to strong-arm TBN into paying the MAGA-boosting TV psychologist and his company tens of millions of dollars – all while delivering little return on their investment.
Having already objected to the bankruptcy proceedings, PBR filed an emergency motion earlier this month asking the court to compel further document production in discovery while also accusing Dr. Phil of a “bad faith” Chapter 11 bankruptcy filing.
In that filing, in which PBR contended that Peteski and Merit Street were stonewalling to avoid discovery, the pro league also claimed Dr. Phil had “orchestrated” the bankruptcy to avoid “menacing litigation” over its financial obligations and “jumpstart” a new media company. Less than two weeks after Merit filed for bankruptcy, Dr. Phil publicly announced he was launching Envoy Media, which the motion notes was founded a day before the Chapter 11 filing.
Seeking a hearing Wednesday afternoon over its call for financial sanctions, TBN said in its emergency filing this week that Peteski’s failure to hand over discovery material and documents had left it woefully unprepared for its deposition of Dr. Phil, which was scheduled for Thursday. While the court had yet to decide on the motions as of Thursday morning, McGraw did appear for his scheduled deposition.
“By its own admission in a meet-and-confer between counsel on August 26, 2025, Peteski still has not produced all of Phillip C. McGraw’s emails and text messages (despite his deposition being scheduled to begin in less than 48 hours from the time of such conference), nor has it produced all of the documents concerning Envoy,” the Christian broadcaster noted. “Peteski’s same delay tactics persist. The pattern is so striking that it is more than mere déjà vu; it is a deliberate rerun, scripted by parties who have decided that the Court’s orders are optional guidance rather than binding directives.”
TBN also accused Dr. Phil of “exerting his control over Peteski and strategically limiting his production in the hope that Trinity and PBR will cancel or postpone his deposition, adding that he had “delayed and restricted production of key documents directly relevant to his testimony, making it impossible to question him fully unless the deposition is moved.”
Based on what it described as Dr. Phil’s discovery gamesmanship, TBN and PBR were also seeking a “brief adjournment” of the upcoming September 2 bankruptcy hearing and a possible rescheduling of McGraw’s deposition, along with lawyers’ fees.
Although TBN and PBR accuse Dr. Phil and his lawyers of intentionally blocking and delaying discovery, the bull-riding league highlighted in its Tuesday joinder filing that the text messages they have received involving Merit Street executives are highly revealing.
Just before Merit Street filed for bankruptcy, Cheatwood texted other Merit employees that “the current thinking, just approved by our lawyers and bankruptcy advisors,” was to reduce the network’s business to “no live news, no new production of any kind. Just the playlist—8 hours that repeats—comprised of current programming.”
Adding that Dr. Phil would like it “if somebody can just push play and be done with it…that would be perfect,” Cheatwood went on to explain that a small group of Merit employees would be “left behind” to carry out the network’s operations. Meanwhile, he noted that they “intend to standup newco [i.e.,Envoy] immediately after the filing so the ‘chosen’ will resign MSM and join newco at the time.”
Cheatwood also noted that a small group of staffers would technically remain employees with Merit as long as it “was operating,” but they would simultaneously sign “consulting agreement[s]” with Envoy. “The way this will probably work is once MSM is wound down there will be an auction of assets and newco will bid to buy the MSM program library,” he texted.
“The Debtor and its executives knew the Envoy scheme was problematic and tried to conceal it by using only personal emails and texts,” PBR noted in its filing. “On June 30 (two days before the bankruptcy), Mr. Cheatwood instructed a colleague that ‘any communication involving timing of events, strategies, etc. we need to not use the merit street e-mail system. Use text instead.’”
Additionally, the day after Merit filed for bankruptcy, Cheatwood reiterated that instruction, telling another colleague that any “emails that include discussion of newco or related strategies let’s use everyone’s personal email.”
In the ensuing weeks, Cheatwood stated that he and Merit Street Chief Executive Officer Ken Solomon had to “be very careful with our public activities associated with Envoy since we are still full and active employees” of Merit, adding that any “[a]ctivities that would indicate we are more focused on Envoy could be problematic if called into question.”
He also said in one text about the “dilemma” he faced that he’d “been advised not to do anything to indicate an attachment to Envoy,” since he was the lone remaining officer at Merit.
The Independent has reached out to the lawyers and representatives for Cheatwood, Dr. Phil, Merit Street, TBN and PBR for comment.
