Pro bull riding league claims Dr. Phil ‘orchestrated' bankruptcy to avoid litigation and ‘jumpstart' new media venture
Specifically, the PBR – which claims Merit Street owes it $181 million – alleges that Dr. Phil 'orchestrated this Chapter 11 Case to avoid menacing litigation against PBR and jumpstart' a new media venture, noting that Dr. Phil founded Envoy Media the day before Merit Street filed for bankruptcy.
PBR's motion, which was filed on Wednesday in the US Bankruptcy Court for the Northern District of Texas, comes ahead of an August 19 hearing in which the court will decide whether to convert the bankruptcy to Chapter 7 and liquidate the assets, dismiss the filing, or approve debtor-in-possession (DIP) financing.
The Independent has reached out to attorneys for Merit Street and PBR for comment.
While PBR says in the motion that 'it believes that conversion to chapter 7 is in the creditors' best interests and has formally requested that relief from this Court,' it also notes that Trinity Broadcasting Network – formerly Merit Street's largest shareholder – has requested that the filing be dismissed. Merit Street filed a lawsuit last month alleging that TBN left the upstart channel over $100 million in debt and with no choice but to file for bankruptcy.
Meanwhile, less than two weeks after Merit Street filed for bankruptcy and was effectively left for dead, Dr. Phil announced that he was launching a brand new media startup called Envoy Media, which would essentially be a carbon copy of the 'anti-woke' Merit Street network. In a press release, Envoy Media said it would include 'live, balanced news, original entertainment programming, and immersive viewer experiences,' as well as shows by McGraw and his friend and Merit Street cohort Steve Harvey.
In its motion filed this week, PBR contends that Merit Street and Peteski Productions, the network's majority equity holder that is run by Dr. Phil, are stonewalling to avoid discovery on the case in the hopes of quickly getting DIP financing approved.
According to PBR, Dr. Phil 'orchestrated' the Chapter 11 filing in order to evade litigation over unpaid fees and quickly transfer assets to Envoy Media, which was founded the day before Merit filed for bankruptcy and sued Trinity. This is all part of an effort, PBR alleges, for Dr. Phil and Peteski to potentially avoid liability for any additional estate claims by rushing through DIP financing and a sale process.
The motion further notes that PBR has served dozens of document requests to Merit Street and Peteski in recent weeks in order to determine whether the case was filed in bad faith, but has only received a fraction of the documents. Peteski, which has not responded to any of the requests, citing the lack of a protective order.
Therefore, PBR is asking the court to compel the debtor and Peteski to immediately produce any withheld discovery, stating that it is necessary to establish whether the bankruptcy filing serves the best interest of all parties involved. On top of that, PBR claims that the delay tactics from Merit and Peteski leave it unprepared to properly question witnesses, specifically Dr. Phil, who is scheduled to be deposed on August 14.
Soon after it officially launched in April 2024, Merit Street announced to great fanfare that it had signed PBR to a four-year deal to air bull riding events on the network. However, the league pulled its programming from the channel in November, claiming that Merit had failed to make payments for PBR rights fees.
Since then, the company has been seeking $181 million in damages through arbitration, alleging breach of contract. The league also said it suffered 'reputational and financial damage' after it was forced to pull its content due to non-payment and find midseason alternative broadcasting options.
'PBR honored its contract with Dr. Phil's Merit Street Media, delivered on every performance metric, and brought more than one million viewers to the new network. Dr. Phil and his company completely reneged on the deal just five months in,' the league said in a statement last month after it initially filed its objection.
Merit, meanwhile, had initially omitted PBR from its list of its 30 largest creditors, even though the chief restructuring officer Gary Broadbent admitted in court filings that the litigation from PBR over the unpaid fees claim was a key reason the company pursued bankruptcy.
While PBR CEO Sean Gleason would later be appointed to the official committee of unsecured creditors, the most recent UCC statement shows that the committee has now dropped to just two members, according to an amended notice filed by the US Trustee's office.
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