Dr. Phil Lawsuit and the Collapse of Merit Street Media

The Dr. Phil lawsuit over Merit Street Media ended in a bankruptcy court ruling that dismantled the network. On October 28, 2025, U.S. Bankruptcy Judge Scott W. Everett found that Phil McGraw acted in bad faith, destroyed evidence, and tried to manipulate the case to favor himself and select creditors. He converted Merit Street’s Chapter 11 reorganization into a Chapter 7 liquidation, handing what remained to a court-appointed trustee.¹ The ruling landed in the middle of two lawsuits filed against each other by McGraw’s side and its partner, Trinity Broadcasting Network, plus a $181 million claim from a third major creditor.

The Deal Behind Merit Street

Merit Street Media was a joint venture between McGraw’s production company, Peteski Productions, and Trinity Broadcasting Network, a nonprofit Christian broadcaster. The parties signed a binding letter of intent on January 10, 2023. Two days later, TBN paid Peteski a $20 million good-faith payment that McGraw had demanded.²

Under the agreement, TBN would provide production and distribution, while Peteski would deliver 160 ninety-minute episodes of a revamped talk show, Dr. Phil Primetime. McGraw was to receive $50 million per year for ten years, a $500 million contract.² TBN initially held 70% of the venture and Peteski 30%. The network went on air in April 2024, anchored by McGraw’s show and programming licensed from Professional Bull Riders.¹

In August 2024, a stock swap flipped the ownership split so that Peteski held 70% and TBN held 30%. TBN later alleged McGraw engineered the reversal to reduce it to a “passive minority investor,” a maneuver McGraw himself reportedly called a “gangster move.”³

How the Venture Fell Apart

The operation ran into trouble almost immediately. Merit Street’s lawsuit later described TBN’s production services as “comically dysfunctional,” pointing to teleprompters that failed during live broadcasts, broken monitors, and substandard editing equipment.⁴ Merit Street also alleged TBN withheld distribution payments and forced the network into costly third-party distribution deals instead of using TBN’s own local stations, producing $96 million in losses.⁵

Layoffs followed. Merit Street cut 38 employees in August 2024. Its four-year partnership with PBR collapsed in November 2024, with PBR alleging the network missed required payments. By June 2025, another 40 employees were let go, and Dr. Phil Primetime was put on hiatus.⁴

The Bankruptcy Filing and Suit Against TBN

On July 2, 2025, Merit Street filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Texas and, on the same day, sued TBN for breach of contract.⁶ The petition listed estimated assets and liabilities each in the $100 million to $500 million range.⁷ The complaint accused TBN of a “conscious, intentional pattern of choices” to sabotage the venture and of abusing its position as controlling shareholder to enrich itself and its CEO, Matthew Crouch.

TBN’s Countersuit

TBN filed a countersuit in August 2025, alleging McGraw had run a “years-long fraudulent scheme” designed to “fleece TBN, a not-for-profit corporation, to enrich McGraw, his associates and affiliates.”⁸ According to TBN, McGraw lied about viewership, advertising revenue, production costs, and the terms of his prior CBS contract, falsely telling TBN that CBS had offered him $75 million a year to stay. TBN also alleged McGraw originally promised to contribute his 21-year media library at no cost, then demanded TBN pay $100 million for a 50% interest in it.⁹ McGraw’s representatives denied the allegations, calling TBN’s suit “riddled with provable lies.”

PBR’s $181 Million Claim and the Envoy Media Issue

Professional Bull Riders entered the bankruptcy as the largest creditor, asserting a $181 million claim for unpaid media rights fees.¹⁰ PBR filed an emergency motion arguing that the entire Chapter 11 had been orchestrated in bad faith so McGraw could move assets to a newly formed company, Envoy Media, which had been incorporated one day before the bankruptcy filing.¹¹ PBR asked the court to convert the case to Chapter 7.

The Judge’s Ruling

Judge Everett’s October 28, 2025 bench ruling denied McGraw’s bid to keep the case in Chapter 11 and ordered it converted to Chapter 7 liquidation, meaning the company would be wound down and its assets sold by an impartial trustee.¹

The judge said Merit Street was “dead as a doornail when the bankruptcy was filed” and that “there never has been a pretense of a rehabilitation or reorganization.”¹² He described the case as a “broken, three-legged stool,” citing McGraw’s destruction of evidence, non-transparent testimony from company leadership, and a conflicted creditors’ committee.⁷

The evidence finding was central. The judge determined that McGraw had deleted a text message in which he described a strategy to “wipe out” creditor claims held by TBN and PBR, violating court orders. “Candor to the court is critical,” Everett said. He also found that McGraw had fired nearly all Merit Street employees, shut down operations, and launched Envoy Media to pick up the debtor’s remaining assets and hire away its staff. He characterized McGraw’s move to force out TBN as a “gangster move” and concluded that “Mr. McGraw believed he was calling the shots.”¹

The formal conversion order was entered on November 18, 2025, in Case No. 25-80156.¹³ A written opinion the same day called Merit Street a “zombie of a company” with “virtually no employees, virtually no operations, and virtually nothing left to do other than sell a media library.”¹⁴

Appeal and Liquidation

A spokesperson for Peteski Productions said the decision would be appealed immediately and denied that McGraw destroyed evidence.¹² Both Merit Street and Peteski filed motions seeking a stay pending appeal. Judge Everett briefly delayed entry of the conversion order to hear those motions, and the parties said that if the bankruptcy court denied the stay, they would seek one from the district court.¹⁵

The case is now in Chapter 7, with a trustee overseeing the sale of assets, including the media library, and the ongoing litigation against TBN. Peteski Productions separately agreed to pay roughly $925,000 to former Merit Street employees.⁷ McGraw has moved on to Envoy Media, which secured a carriage deal with Charter Communications to reach Spectrum subscribers in major markets.¹⁶

1
Variety. Dr. Phil Merit Street Bankruptcy Judge Ruling Chapter 7 Liquidation
2
Variety. TBN Sues Dr. Phil, Alleging Fraudulent Scheme
3
Deadline. TBN Third-Party Complaint Against Peteski and McGraw
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Fort Worth Report. Dr. Phil’s Merit Street Media Files Bankruptcy, Sues Trinity Broadcasting Network
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Financier Worldwide. Merit Street Media Files for Chapter 11
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Deadline. Dr. Phil Merit Street Media JV Bankruptcy, Sues Trinity
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Fox 4 News. Dr. Phil Ordered to Sell Off Media Company’s Assets in Bankruptcy Case
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Deadline. Dr. Phil Countersued by Trinity Broadcasting in Bankruptcy
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The Independent. Dr. Phil Bankruptcy Christian Broadcaster Trinity
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Dallas Morning News. Professional Bull Riders Hit Dr. Phil’s Merit Street Media With $181M Debt Claim
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Variety. PBR: Dr. Phil Orchestrating Merit Street Bankruptcy
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Hollywood Reporter. Dr. Phil Loses Trial Over Media Startup Bankruptcy
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Epiq. Merit Street Media, Inc. Bankruptcy Case Information
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U.S. Bankruptcy Court for the Northern District of Texas. Merit Street Media Opinion
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9fin. Dr. Phil’s Merit Street Appeal Ruling Chapter 7
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Hollywood Reporter. Dr. Phil New Network Charter Carriage Deal