Television personality Phil McGraw, better known as Dr. Phil, has been ordered by a Texas federal judge to liquidate his media company, Merit Street Media, after the court found he had misled creditors and deleted key communications during bankruptcy proceedings.
The ruling marks a major setback for McGraw, who had sought Chapter 11 bankruptcy protection for the now-defunct media venture that once promised to reshape the daytime TV landscape. Instead, U.S. Bankruptcy Judge Scott Everett ruled the case must be converted to a Chapter 7 liquidation, allowing a court-appointed trustee to sell off the company’s assets to repay creditors.
“Candor to the court is critical,” Everett said during Tuesday’s hearing, according to Deadline (link). The judge criticized McGraw for “not being forthright” about his financial dealings and found that “crucial” communications had been erased. Everett also alleged that Merit Street Media had been “paying specific creditors over others,” a violation of bankruptcy protocol.
Everett was unsparing in his assessment, stating that McGraw’s company “was as dead as a doornail when the bankruptcy was filed.” He added that McGraw appeared to be “juicing one business to launch another,” referring to his new venture, Envoy Media, which launched just before Merit Street’s bankruptcy filing.
The decision follows months of litigation stemming from McGraw’s ill-fated partnership with the Trinity Broadcasting Network (TBN). In 2023, McGraw signed a reported $500 million joint venture with the Christian broadcaster to launch Merit Street Media, which debuted in April 2024 with high-profile hosts including McGraw himself and crime commentator Nancy Grace.
By summer 2025, however, the relationship had soured. Merit Street filed for Chapter 11 protection in July, accusing TBN of reneging on more than $100 million in financial obligations and “sabotaging” the network’s operations. TBN countered with a lawsuit of its own, alleging McGraw engaged in “reprehensible conduct” and attempted to manipulate contractual terms for personal gain.
“TBN appreciates the court taking the time and energy to hear the facts, learn the truth, and provide a detailed recitation of the events that transpired,” said TBN General Counsel John Casoria in a statement following Tuesday’s ruling. “TBN looks forward to bringing this matter to a conclusion with a Chapter 7 trustee at the helm.”
Professional Bull Riders (PBR), another creditor tied to the case, also welcomed the outcome. “Dr. Phil’s Merit Street Media reneged on its agreement with PBR after just five months for no valid reason, and then Dr. Phil attempted to skirt obligations a second time through a bankruptcy scheme the court called an ‘anomaly,’” a PBR spokesperson said, according to Deadline. “We’re grateful they did not allow it. We look forward to continuing this process … to recover what we’re owed.”
McGraw’s representatives at Peteski Productions quickly disputed the court’s findings, vowing to appeal. “We respectfully disagree with the court’s ruling and take issue with its comments concerning Dr. Phil McGraw,” the company said in a statement. “Dr. Phil is a leader of the highest integrity whose actions reflect honesty, ethics, and a lifelong commitment to helping people.”
Later that evening, McGraw’s team released a more forceful statement asserting that the ruling “improperly” accused him of destroying evidence. “We take great exception to the court’s improper assertions regarding the alleged destruction of evidence, which simply did not happen,” Peteski Productions said. “We will not let this stand given all that Dr. Phil and Peteski have done to protect Merit Street employees, distributors, and other interested parties.”
The statement went on to claim that McGraw only became the sole director of Merit Street “long after the company became overwhelmed by debt thanks to Trinity Broadcasting’s mismanagement.” McGraw, it added, “is proud of his efforts to help Merit Street through this process but is also pleased that he can now devote his time and energy to his new network, Envoy.”
Court records, however, show that no formal appeal had been filed as of late Tuesday, according to The Hollywood Reporter.
Even as the legal drama unfolds, McGraw appears to have already moved on. Earlier this month, he announced a carriage deal with Charter Communications to distribute his new Envoy TV network, which will be available on Spectrum packages reaching an estimated 12.6 million subscribers across 41 states. “I’m thrilled to be putting on the Charter team jersey and launching our new flagship Envoy TV network,” McGraw said in an October 6 statement.
The rapid pivot underscores McGraw’s resilience—and the potential for controversy to follow him into his next venture. While the bankruptcy court’s ruling may have shut the door on Merit Street, it also sets the stage for a prolonged legal and financial showdown between McGraw, TBN, and other creditors.
For now, the television doctor who once built an empire by helping others confront their own crises finds himself confronting one of his own.
