Merit Street Media, owned by Dr. Phil McGraw, is set to be liquidated after a U.S. federal judge ruled that the famous TV psychologist showed a lack of honesty by deleting incriminating messages.
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Dr. Phil filed for bankruptcy in July and later sued his distribution partner, Trinity Broadcasting, for breach of contract, accusing the company of “sabotage” and abusing “its position as controlling shareholder.”
According to bankruptcy judge Scott Everett, “there is no hope for rehabilitation” of the bankruptcy petition, and therefore Merit Street must now move into “liquidation mode.”
The ruling allows the court to sell the network’s assets to repay its creditors.
The judge’s decision stems from a long-standing dispute dating back to the launch of the cable television network founded by Dr. Phil.
Trinity Broadcasting filed a countersuit against McGraw, alleging that he and his production company, Peteski, carried out a “multi-year fraudulent scheme designed and executed to deceive” the television conglomerate.
The distributor also accused him of “reprehensible conduct” during negotiations for a 10-year contract worth $500 million, claiming he created a “false sense of urgency” when proposing the launch of a new network after his departure from CBS.
Dr. Phil established a new venture called Envoy Media one day before Merit Street filed for bankruptcy. Envoy was set to deliver the same content as Merit across television and digital platforms.
The bankruptcy trial in September revealed that McGraw made a “guarantee” to his friend and creditor Jamie Ribman, promising repayment regardless of the court’s decision.
The text messages were not found, suggesting that Dr. Phil may have deleted them.
Photos: Wikimedia Commons. This content was created with the help of AI and reviewed by the editorial team.
