Dr. Phil's Bankruptcy Case Keeps Getting Weirder

A federal judge ruled that a bankrupt television network, started by clinical psychologist-turned-TV personality Phil McGraw, will be liquidated and sold after finding that Dr. Phil sought to destroy evidence in the form of incriminating text messages. The October 28, 2025 decision by Judge Scott Everett, a U.S. bankruptcy judge for the Northern District of Texas, means that a Chapter 11 bankruptcy filing for the McGraw-founded Merit Street Media Inc. will be converted into a Chapter 7 liquidation. That is, unless Everett's decision is overturned on an appeal that a spokesperson for McGraw's Peteski Productions claimed is forthcoming.

Court records revealed that McGraw deleted text messages, later found in discovery, in which he called the bankruptcy filing a move to "wipe out" any monetary claims and interest in Merit by his former partner, Trinity Broadcasting Network (TBN), as well as Professional Bull Riders (PBR), which has a $181 million claim related to missed payments for its bull riding content.

Normally, Chapter 11 is used by businesses to reorganize and have companies roar back to life after bankruptcy. But Judge Everett, who remarked that he had never seen a case like this, said Merit Street Media was "dead as a doornail" and should be liquidated and sold under a trustee so "creditors can have faith that the process will play out fairly and neutrally," (per Entertainment Weekly).

In April 2024, Phil McGraw, best known for his syndicated advice show "Dr. Phil" that aired for 20 years on CBS, partnered with Trinity Broadcasting Network to launch a new cable channel called Merit TV, which broadcasted programs such as "Dr. Phil Primetime," "Crime Stories with Nancy Grace," and a couple of news shows. Among Merit TV's original content included McGraw having a one-on-one interview with President Donald Trump (who went into bankruptcy several times and then recovered) and embedding himself with ICE officials during actions in Chicago and Los Angeles.

But by August 2024, the company laid off 38 out of its 100 employees. Another 40 employees were laid off mid-2025 during a summer hiatus. By that time, Merit TV was merely a stagnant station that showed reruns and infomercials. Finally, in early July 2025, Merit Street filed for bankruptcy, claiming assets and liabilities of between $100 million and $500 million. Merit also sued TBN, claiming that the network failed to provide national distribution and other services and failed to cover $100 million in costs. TBN countersued McGraw and Peteski Productions, alleging it invested $100 million into Merit TV while McGraw failed to comply with a 10-year, $500 million contract that included the production of 160 90-minute Dr. Phil shows and failed to bring in the advertising revenue and product integrations he promised.

Trinity Broadcasting Network also alleged that Phil McGraw obtained a majority interest of 70% of Merit Street Media in August 2024 after falsely claiming he could raise $425 million from family and friends. According to court documents, TBN further alleged that McGraw created a new company, Envoy Media, a day prior to the Chapter 11 suit, with the intention to "fleece Merit Street of key employees and assets for McGraw's and Peteski's benefit." The Hollywood Reporter released that McGraw testified to the court that the assertion that the Chapter 11 filing was a ploy to transfer the TV station to Envoy Media is absurd, claiming, "I'm doing everything I can to keep Merit up and running." McGraw later added, "I didn't make the decision to file for bankruptcy. I capitulated."

A spokesperson for Peteski Productions shared in a statement that Judge Scott Everett's decision, partly compelled by deleted text messages, will be appealed. "We take great exception to the court's improper assertions regarding the alleged destruction of evidence, which simply did not happen," the spokesperson said (via Fox News). However, a Chapter 7 bankruptcy might be favorable here, given the failing network and lawsuits.