{"id":257532,"date":"2025-10-28T23:33:07","date_gmt":"2025-10-28T23:33:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/257532\/"},"modified":"2025-10-28T23:33:07","modified_gmt":"2025-10-28T23:33:07","slug":"judge-rules-against-dr-phil-in-merit-street-bankruptcy-orders-chapter-7-liquidation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/257532\/","title":{"rendered":"Judge Rules Against Dr. Phil in Merit Street Bankruptcy, Orders Chapter 7 Liquidation"},"content":{"rendered":"

\n\tA federal judge ordered that a bankruptcy proceeding for Dr. Phil<\/a> McGraw\u2019s Merit Street Media<\/a>, the TV personality\u2019s failed television network venture, be converted to a Chapter 7 liquidation \u2014 saying that was in the best interests of creditors including Trinity Broadcasting Network<\/a> and Professional Bull Riders.<\/p>\n

\n\tMerit Street was formed as a joint venture between TBN, a not-for-profit Christian broadcaster, and\u00a0McGraw\u2019s Peteski Productions. Merit\u00a0filed for Chapter 11 bankruptcy protection<\/a>\u00a0on July 2, 2025, after running into financial straits. At the same time, Merit Street\u00a0sued TBN, alleging breach of contract and claiming it \u201cabused its position as the controlling shareholder\u201d; subsequently, TBN countersued McGraw, alleging fraud<\/a>.<\/p>\n

\n\tThrough a Chapter 7 liquidation, creditors can \u201chave faith\u201d that a trustee will be fair and impartial in the sale of the Merit Street assets, Judge Scott W. Everett of the U.S. Bankruptcy Court for the Northern District of Texas said at a hearing Tuesday in which he announced his ruling. That\u2019s preferable to a dismissal of the Chapter 11 case, Everett said, which would let McGraw pay his \u201cfavored creditors\u201d instead of his \u201cunfavored creditors,\u201d meaning TBN and PBR<\/a>. He also said Chapter 7 would result in a better outcome for creditors than the appointment of a Chapter 11 examiner or the appointment of a Chapter 11 trustee.<\/p>\n

\n\tEverett said \u201cI\u2019ve never seen a case\u201d like that of Merit Street Media, in which a bankrupt entity was controlled by a party (i.e. McGraw) that hired the former company\u2019s few remaining employees and launched a new firm (Envoy Media) that planned to acquire what was left of the debtor\u2019s assets. McGraw\u2019s Peteski Productions was the proposed debtor-in-possession lender in the Merit Street bankruptcy filing; McGraw had been named as the sole director of Merit.<\/p>\n

\n\t\u201cMr. McGraw believed he was calling the shots,\u201d Everett said.<\/p>\n

\n\tIn his opening comments discussing the case, Everett said that \u201cthis Chapter 11 case is an anomaly\u201d and said that in his opinion \u201cthere never has been a pretense of a rehabilitation or a reorganization\u201d of Merit Street\u2019s business, which he said was \u201cdead as a doornail\u201d when it filed for bankruptcy. In a Chapter 7 bankruptcy, a business is dissolved and its assets are sold to pay off creditors.<\/p>\n

\n\tAccording to court documents, McGraw had said he was working on \u201cgetting rid of TBN\u201d as a partner in Merit Street and was executing a \u201cgangster move\u201d to make TBN a noncontrolling shareholder in the company. McGraw formed a new company, Envoy Media, after filing for Chapter 11 bankruptcy protection for Merit Street; the bankruptcy, he said, would \u201cwipe out\u201d the claims against Merit by TBN and former content licensor PBR, according to evidence presented in court.<\/p>\n

\n\tIn addition, TBN also filed a motion to impose sanctions on Peteski, alleging Peteski failed to produce requested documents \u2014 and Everett, in his ruling, found that McGraw had deleted an \u201cunflattering\u201d text message in which McGraw described his strategy to \u201cwipe out\u201d TBN and PBR\u2019s claims via the Merit Street bankruptcy. McGraw evidently did so to avoid having it produced in the court proceeding, Everett said, in violation of the judge\u2019s orders.<\/p>\n

\n\tIn a statement to Variety, a spokesperson for McGraw\u2019s Peteski Productions said, \u201cWe respectfully disagree with the court\u2019s ruling and take issue with its comments concerning Dr. Phil McGraw<\/a>. Dr. Phil is a leader of the highest integrity whose actions reflect honesty, ethics, and a lifelong commitment to helping people. We are reviewing all of our options regarding an appeal, which is likely.\u201d<\/p>\n

\n\tEverett was ruling on a motion filed by TBN and related party TCT Ministries seeking an emergency order to: dismiss Merit\u2019s Chapter 11 case; convert it to a Chapter 7 liquidation; or appoint a Chapter 11 trustee to oversee Merit\u2019s reorganization. In addition, PBR, which has a $181 million claim<\/a> against Merit Street, filed a partial joinder in support of the TBN and TCT motion. PBR is owned by TKO Group, parent of WWE and UFC; it had entered into an agreement with Merit in mid-2024 to license bull-riding programming to Merit TV. PBR terminated its agreement with Merit in November 2024 after it was not paid by Merit.<\/p>\n

\n\tPBR said in a statement Tuesday, \u201cDr. Phil\u2019s 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 \u2018anomaly.\u2019 We\u2019re grateful they did not allow it. We look forward to continuing this process, which thanks to today\u2019s ruling, will be overseen by an impartial trustee, to recover what we\u2019re owed by Dr. Phil and his company.\u201d<\/p>\n

\n\tEverett noted that Peteski had agreed to having the Chapter 11 bankruptcy case of Merit Street dismissed. That, in the judge\u2019s estimation, was because Peteski and McGraw wanted to refile for bankruptcy in another jurisdiction.<\/p>\n

\n\tTBN also filed a counterclaim against Dr. Phil<\/a>, alleging he engaged in a scheme to \u201cfleece\u201d the Christian broadcasting company and \u201cenrich\u201d himself and \u201chis associates and affiliates.\u201d That suit seeks unspecified monetary damages. <\/p>\n

\n\tDr. Phil rose to fame as a guest on Oprah Winfrey\u2019s talk show before launching his own daytime show with the backing of Winfrey\u2019s Harpo Productions. He officially launched Merit Street Media in April 2024, which at launch claimed to reach more than 80 million homes with a programming lineup anchored by the \u201cDr. Phil Primetime\u201d talk show.<\/p>\n

\n\tAccording to TBN, in 2022, McGraw sought to strike a deal with Trinity as a potential network to replace CBS as a producing and distribution partner for the \u201cDr. Phil Show.\u201d On Jan. 10, 2023, TBN entered into a binding letter of intent with Peteski to create Merit Street Media. Under the agreement, Merit Street was owned 70% by TBN and 30% by Peteski.<\/p>\n

\n\tHowever, according to TBN, Peteski had misrepresented to Trinity that \u201cCBS was selling out the advertising inventories for the \u2018Dr. Phil Show’\u201d and that the new programming McGraw would create for TBN would be 90-minute shows, rather than the then-current 60-minute shows, in order to increase overall ad revenue through the longer show format. Moreover, Peteski told TBN that the then-current $68 million annual production costs for the \u201cDr. Phil Show\u201d would be reduced by at least 40% by moving all related production activities from California to Texas and not bringing any current personnel associated with show to Texas, as well as \u201celiminating unionized employees and benefits and reducing overall headcount,\u201d among other cost-saving measures.<\/p>\n

\n\tBy June 2024, however, Peteski and McGraw \u201chad not produced a single 90-minute episode, let alone the 160 episodes required by the [contract], and based on its production schedules, apparently had no intent to produce the \u2018new content\u2019 required under the [contract] in the remaining weeks on the production calendar,\u201d the TBN lawsuit alleged. Meanwhile, despite TBN \u201cmaking its full library of content available\u201d to be used to fill Merit Street\u2019s 24-hour broadcast schedule as needed, \u201cMcGraw and\/or the management team hired at McGraw\u2019s direction rejected most of the TBN programming,\u201d Trinity\u2019s suit alleged. McGraw and Peteski \u201cinstead insisted that Merit Street enter into expensive distribution deals with McGraw\u2019s friends,\u201d including Steve Harvey, Nancy Grace, Chris Harrison and Lauren Zima, \u201cto TBN\u2019s (and Merit Street\u2019s) detriment,\u201d per the complaint.<\/p>\n

\n\tPeteski, in a court filing<\/a>, disputed TBN\u2019s claim that McGraw failed to produce any of the promised episodes of\u00a0\u201cDr. Phil Primetime\u201d under the JV agreement. Lawyers for Peteski lawyers had claimed that, \u201cFrom the outset of this Bankruptcy Case, both [TBN and PBR] entered into a \u2018press strategy\u2019 fueled in large part by incendiary pleadings they knew would be picked up by the media which, predictably, did occur. The effect of this is to not only insult and denigrate Peteski and Dr. McGraw but also to depress the value of the Debtor.\u201d<\/p>\n

\n\tOn Aug. 1, 2024, TBN informed McGraw that it would be amenable to increasing Peteski\u2019s ownership share in Merit Street from 30% to 70% (thereby decreasing TBN\u2019s ownership share from 70% to 30%) subject to the parties addressing \u201ca multitude of outstanding deal points to be finalized,\u201d per TBN\u2019s lawsuit. But \u201cMcGraw never intended to perform any steps beyond the initial stock swap,\u201d according to the complaint. \u201cIndeed \u2014 unbeknownst to TBN \u2014 McGraw described his plan on August 3, 2024, as a \u2018gangster move\u2019 to reduce TBN to nothing more than \u2018a passive minority investor role\u2019 in Merit Street,\u201d according to the TBN suit. (In Peteski\u2019s Aug. 12 filing with the bankruptcy court, McGraw\u2019s lawyers said the \u201cgangster move\u201d statement \u201cwas made by misrepresenting an email [from Dr. Phil] which TBN improperly and illegally accessed off its server which it was hosting for the Debtor as part of its contractually obligated services\u201d under the JV agreement; the lawyers did not provide context for the \u201cgangster move\u201d comment.)<\/p>\n

\n\tMerit Street\u2019s Chapter 11 bankruptcy filing this summer \u201ccame as a surprise to TBN because it still controlled two of the three directors on Merit Street\u2019s board\u201d and had not approved the bankruptcy petition, the broadcaster said in its complaint.<\/p>\n

\n\tOne day before Merit Street filed for bankruptcy, Peteski and McGraw formed a new company, Envoy Media Co., as outlined in Trinity\u2019s complaint. \u201c[D]uring the same time they were allegedly negotiating with TBN to restructure Merit Street, McGraw and Peteski were making plans to create a new company, Envoy, to replace Merit Street,\u201d the TBN lawsuit said. The day after Merit Street filed the Chapter 11 case, all but six of the remaining Merit Street employees were laid off; meanwhile, \u201cTBN has reason to believe that former Merit Street employees and contractors are performing services for Envoy,\u201d the lawsuit alleged.<\/p>\n","protected":false},"excerpt":{"rendered":"A federal judge ordered that a bankruptcy proceeding for Dr. Phil McGraw\u2019s Merit Street Media, the TV personality\u2019s…\n","protected":false},"author":2,"featured_media":257533,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[9666,88,9952,27339,52982,64466],"class_list":["post-257532","post","type-post","status-publish","format-standard","has-post-thumbnail","category-entertainment","tag-dr-phil","tag-entertainment","tag-merit-street-media","tag-pbr","tag-phil-mcgraw","tag-trinity-broadcasting-network"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/257532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=257532"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/257532\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/257533"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=257532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=257532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=257532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}