A federal bankruptcy judge in Texas has stripped control from talk-show host Dr. Phil’s Merit Street Media and ordered the network into Chapter 7 liquidation, siding with religious broadcaster Trinity Broadcasting Network in a fast-escalating legal battle over who ultimately controls the Christian-facing TV venture.
U.S. Bankruptcy Judge Scott W. Everett ruled Tuesday that a court-appointed trustee, not Phil McGraw, must take control of the embattled enterprise to protect key creditors.
Everett said Chapter 7 was the only option that could ensure a fair outcome to creditors, concluding Merit Street was “dead as a doornail” when it filed for bankruptcy in July.
He rejected McGraw’s efforts to keep the case under Chapter 11, saying that the structure would allow the TV personality — known to viewers as Dr. Phil — to favor his own “preferred creditors” while sidelining TBN and Professional Bull Riders, which is seeking $181 million from the network.
Everett said he had “never seen a case” in which a debtor declares bankruptcy while simultaneously hiring away remaining employees and launching a new media entity, Envoy Media, poised to absorb the assets.
“Mr. McGraw believed he was calling the shots,” the judge said.
TBN, which held a 70% controlling stake in Merit Street, filed an emergency motion to convert the case, accusing McGraw of attempting to use bankruptcy as a tactical weapon to erase obligations and replace TBN with a hand-picked business structure.
Professional Bull Riders, or PBR, filed in support of TBN, alleging McGraw had reneged on contractual payments after just months of partnership.
In a statement to Variety, McGraw’s lawyers called the ruling improper and said they would immediately appeal.
“We take great exception to the court’s improper assertions regarding the alleged destruction of evidence, which simply did not happen,” a spokesperson said, adding that McGraw was acting to protect Merit employees and stakeholders following “Trinity Broadcasting’s mismanagement.”
Everett said McGraw deleted an “unflattering” text outlining a strategy to “wipe out” TBN and PBR’s claims via bankruptcy. The judge concluded the deletion violated court orders; TBN said the ruling vindicated its position.
“TBN appreciates the court taking the time and energy to hear the facts, learn the truth, and provide a detailed recitation of the events,” its general counsel said.
TBN also separately accused McGraw of a plan to “fleece” the Christian broadcaster and enrich allies, including major media personalities with whom McGraw later signed parallel distribution agreements.
McGraw denies wrongdoing and maintains that TBN sabotaged the venture.
The dispute centers on control of a fast-growing Christian and conservative-leaning media platform, launched in April 2024 and promoted to reach more than 80 million households through programs such as “Dr. Phil Primetime.”
TBN argues McGraw abandoned agreed Christian programming obligations, while McGraw insists TBN undermined Merit from within.
With the ruling, an independent trustee, not McGraw or TBN, will immediately assume liquidation authority. The court will now determine how creditors, including Christian entities, are repaid and whether further civil exposure follows.?
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