\n<\/p>\n
\n\tDr. Phil took the stand on Tuesday in a trial that will decide the fate of his media startup\u2019s bankruptcy, a case that involves allegations that he plundered the company to set up his new venture.<\/p>\n
\n\tHis testimony, lasting hours, was defiant. At every turn, he challenged accusations that he swindled partner-turned-adversary Trinity Broadcasting under a $500 million, 10-year deal.<\/p>\n
\n\t\u201cI\u2019m like the little engine that could,\u201d said Dr. Phil, whose surname is McGraw, referring to the months leading up to the bankruptcy in which Merit Street was starved for cash. \u201cI\u2019m doing everything I can to keep Merit up and running. This theory, that this was all a ploy to set up Envoy Media, is absurd.\u201d<\/p>\n
\n\tHe was asked about his motivation to abruptly move for Chapter 11 protection.<\/p>\n
\n\t\u201cI didn\u2019t make the decision to file for bankruptcy,\u201d McGraw replied. \u201cI capitulated.\u201d<\/p>\n
\n\tMcGraw\u2019s Merit Street is simultaneously in bankruptcy court and suing Trinity Broadcasting for breach of contract over its downfall. At the same time, the TV host is launching an entirely new venture called Envoy Media. It\u2019s mostly the same as Merit Street but with a user-generated twist. The new company will feature stories from citizen journalists, breaking news and original programming from McGraw and collaborator Steve Harvey.<\/p>\n
\n\tTrinity Broadcasting, in turn, sued Merit Street, arguing that McGraw initiated the proceedings to protect his own interests. The trial will determine the legitimacy of the company\u2019s Chapter 11 filing.<\/p>\n
\n\tAmong the chief discussion points at Tuesday\u2019s hearing: McGraw\u2019s maneuvering to gain majority control of Merit Street to secure lucrative investments from family and friends at a $425 million valuation. Relying on that representation, Trinity Broadcasting increased McGraw\u2019s stake in Merit Street, via his production banner Peteski, to 70 percent while diluting its own stake to 30 percent.<\/p>\n
\n\tAt a federal courthouse in downtown Dallas, McGraw denied assertions that he only paid $7,000 in that deal. \u201cThat was paid by Peteski,\u201d he said. \u201cThere was other compensation too, like agreeing not to sue for default to Peteski for millions of dollars and for agreeing to continue to work for free and continuing to manage the corporation.\u201d<\/p>\n
\n\tOnce the deal was finalized, McGraw described the plan as a \u201cgangster move\u201d to reduce the network to nothing more than a \u201cpassive minority investor,\u201d according to Trinity Broadcasting\u2019s lawsuit.<\/p>\n
\n\tAt the hearing, McGraw doubled down on his position that the transaction was beneficial for both sides.<\/p>\n
\n\t\u201cThis was a four to five year journey and, if they had stayed in long enough, it would have been the best investment they ever made,\u201d he said.<\/p>\n
\n\tUnder a purported $500 million, 10-year agreement, Trinity Broadcasting would provide production and distribution services to Merit Street and Peteski, in turn, would provide new content, including 160 new episodes. <\/p>\n
\n\tThe relationship turned sour last year when it became clear that McGraw couldn\u2019t deliver the viewership numbers, product integrations and advertising revenues he promised to Trinity Broadcasting, the company alleged. It said it spent more than $100 million by the end of June, some of which had to recorded as loans to Merit Street. That figure ballooned as Trinity Broadcasting continued to funnel up to $13 million into the production per month while McGraw failed to deliver a single episode, though a spokesperson for the TV host has said that 214 new episodes of\u00a0Dr. Phil Primetime<\/em>\u00a0aired on Merit.\u00a0(The vast discrepancy about what \u201cdelivered\u201d entails and which episode orders factor in to the Trinity deal mean there\u2019s a lot of fine print in dispute.)<\/p>\n \n\tMcGraw was questioned on a text allegedly supporting allegations that McGraw decided on suing Trinity Broadcasting in May to rid itself of debt, with plans to launch Envoy Media. \u201cI\u2019m suing TBN, and they\u2019ll get what they get,\u201d the message from him read.<\/p>\n \n\tAt this point, \u201cI\u2019m doing everything I can to keep Merit Street on air,\u201d he explained. \u201cAny deal I can make. Anything I could do.\u201d<\/p>\n \n\tEarlier in the trial, Trinity Broadcasting president Matt Crouch suggested that Merit Street viewership was concerning. McGraw on Tuesday challenged the assertion.<\/p>\n \n\t\u201cI sat here listening to Matt say no one was watching,\u201d he said, drawing an admonishment from the court and impeachment from Trinity Broadcasting\u2019s lawyer. \u201cWe\u2019d gone up 51 slots since launch, probably the most successful launch in a decade. We had millions of people watching. I don\u2019t know what he\u2019s talking about. The last thing I wanted to do was sue TBN or shut down Merit Street.\u201d<\/p>\n \n\tMerit TV\u2019s linear channel struggled in the year it produced original programming, averaging under 50,000 viewers in primetime for most of that period. Currently, the channel is populated by reruns of McGraw\u2019s various shows, with no new content. It may soon be dropped by distribution partners.<\/p>\n","protected":false},"excerpt":{"rendered":" Dr. Phil took the stand on Tuesday in a trial that will decide the fate of his media startup\u2019s bankruptcy, a case that involves allegations that he plundered the company to set up his new venture. His testimony, lasting hours, was defiant. At every turn, he challenged accusations that he swindled partner-turned-adversary Trinity Broadcasting under<\/p>\n","protected":false},"author":1,"featured_media":23341,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[54],"tags":[1465,6786,205,14235,791,14005,1167],"class_list":{"0":"post-23340","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entertainment","8":"tag-bankruptcy","9":"tag-defiant","10":"tag-media","11":"tag-phil","12":"tag-stand","13":"tag-startups","14":"tag-takes"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/23340","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23340"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/23340\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/23341"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}