Dr. Phil McGraw’s Peteski Productions says it voluntarily agreed to pay former Merit Street Media employees their pre-bankruptcy compensation as the legal process plays out. 

Merit Street Media, which was formed in 2023 and launched Merit TV in 2024, was a joint venture of McGraw’s Peteski Productions and Trinity Broadcasting that filed for Chapter 11 bankruptcy in July and simultaneously filed a lawsuit against the network that specializes in Christian programming.

According to a memo sent by Peteski attorneys to former Merit Street Media employees and independent contractors, Dr. Phil’s production company agreed to loan the bankrupt company enough cash to fully pay workers for pre-bankruptcy work. The initial loan amount fell short once Trinity Broadcasting was allowed to delay a key hearing by three weeks, but Peteski has upped the figure to do the "right thing."

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"As this process has played out, one of our top priorities has been to do whatever we can for the workers. We thought the issue of worker compensation would be resolved at a July 29 hearing, but TBN asked for and received a three-week delay. In light of the real needs of the workers for this to be resolved, we felt this was the right thing to do," a Peteski spokesperson told Fox News Digital. 

Over 150 checks were written for a total of $925,000, according to the memo. The payments occurred outside of official bankruptcy proceedings.

McGraw agreed to provide Merit Street with new episodes of his "Dr. Phil Show," 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. 

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Merit Street accused Trinity Broadcasting of reneging on its obligations and abusing "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."

The vast majority of former Merit Street Media employees are out of work, while a select few have stayed on based on the supervision of a bankruptcy judge. 

The bankruptcy filing lists both estimated assets and liabilities in the $100-$500 million range. Merit Street is seeking damages, legal costs, and "further relief as the Court may deem just and proper."

Trinity Broadcasting did not immediately respond to a request for comment by Fox News Digital.