A federal judge has ruled that the bankrupt television network founded by clinical psychologist-turned-television personality Phil McGraw will be liquidated and sold after finding that Dr. Phil sought to destroy evidence through incriminating text messages. in 2025 October 28 The decision by Judge Scott Everett, the U.S. Bankruptcy Judge for the Northern District of Texas, means that Merit Street Media Inc., founded by McGraw, has filed for Chapter 11 bankruptcy. will be converted into a Chapter 7 liquidation. That is, unless Everett’s decision is overturned on appeal, which a representative for McGraw’s Peteski Productions says will be filed.
Court records revealed that McGraw deleted text messages, which were later discovered, in which he called the bankruptcy filing to “kill” any monetary claims and interest in merits from his former partner, Trinity Broadcasting Network (TBN), as well as Professional Bull Riders (PBR), which has $181 million.
Typically, companies use Chapter 11 to reorganize and revive their businesses after bankruptcy. But Judge Everett, who noted he’s never seen a case like this, said Merit Street Media is “dead as a doornail” and should be liquidated and sold under a trustee so that “creditors can trust that the process will be fair and impartial” (Entertainment Weekly).
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Merit Street Media layoffs and lawsuits
Phil McGraw with Professional Bull Riders CEO Sean Gleason. PBR later joined TBN in its countersuit against McGraw and his production company. – Click Thompson/Getty Images
in 2024 in April Phil McGraw, best known for his syndicated advice show “Dr. Phil,” which ran for 20 years on CBS, partnered with the Trinity Broadcasting Network to launch a new cable channel, Merit TV, which aired programs such as “Dr. Phil Primetime,” “Crime Stories with Nancy Grace” and several news shows. Merit TV’s original content included McGraw conducting a one-on-one interview with President Donald Trump (who has gone bankrupt several times and then recovered) and interjecting ICE officials during operations in Chicago and Los Angeles.
However, by August 2024, the company had laid off 38 out of 100 workers. Another 40 employees were laid off in 2025. in the middle during the summer break. At the time, Merit TV was just a stagnant station showing reruns and infomercials. Finally, in 2025 In early July, Merit Street filed for bankruptcy, claiming between $100 million and $500 million in assets and liabilities. Merit also sued TBN, alleging that the network failed to provide national distribution and other services and failed to cover $100 million. TBN filed a counterclaim against McGraw and Peteski Productions, alleging that it had invested $100 million in Merit TV and that McGraw had not honored a 10-year, $500 million contract that included 160 90-minute episodes of Dr. Phil’s programming, and failed to deliver the advertising and product integration revenue it promised.
Dr. Phil denies destroying the evidence
in 2025 Phil McGraw leaves the White House dais as President Donald Trump speaks in May. – Andrew Harnik/Getty Images
Trinity Broadcasting Network has also said that Phil McGraw will be in 2024. in August acquired 70% of Merit Street Media by falsely claiming he could raise $425 million from family and friends. According to court documents, TBN also claimed that McGraw created a new company, Envoy Media, a day before the Chapter 11 filing, with the intention of “exiting Merit Street’s key employees and assets for the benefit of McGraw and Peteski.” The Hollywood Reporter reported that McGraw testified in court that the claim that the Chapter 11 filing was a ploy to sell the TV station to Envoy Media was absurd, as he insisted, “I’m doing everything I can to keep Merit going.” 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 ruling, which was prompted in part by the deleted text messages, will be appealed. “We take very seriously the court’s wrongful claims about the alleged destruction of evidence that simply did not happen,” the spokesperson said (via Fox News). However, Chapter 7 bankruptcy may be favorable, given the failed network and lawsuits.
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