The Tool Desk
Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →A federal bankruptcy judge converted Merit Street Media’s Chapter 11 case to Chapter 7 liquidation on October 28, 2025, finding the business had “no hope of rehabilitation.” An independent trustee is to oversee asset sales for creditors. The case concerns McGraw’s television company—not a personal bankruptcy filing by Phil McGraw. His representatives denied wrongdoing and said they would appeal.
What the judge ordered
Judge Scott W. Everett of the U.S. Bankruptcy Court for the Northern District of Texas ordered Merit Street Media into Chapter 7. That shifts control of the bankruptcy estate away from the company’s management and gives an independent trustee responsibility for selling remaining assets under court supervision and pursuing estate claims.
In a memorandum filed November 10, 2025, explaining the ruling, Everett called the case “an anomaly.” The court said the company was experiencing substantial and continuing losses and had “no hope of rehabilitation.” Its decision followed a five-day evidentiary trial held September 16–29, with nine witnesses and nearly 200 exhibits.
Why Merit Street was converted to Chapter 7
The memorandum identified four independent grounds for conversion. The findings described in the court record include attempted destruction of relevant evidence, testimony the judge found less than truthful, and McGraw’s improper influence over the bankruptcy estate. The judge also found that Merit Street’s continuing losses and lack of a realistic path to rehabilitation made reorganization untenable.
#1 Best Overall
- Self Matters: Creating Your Life from the Inside Out
One central dispute concerned text messages. Everett wrote: “I find, based on all the evidence, that [Dr. Phil] deleted the unflattering text message after the bankruptcy petition date because he didn’t want me to see it.” The Los Angeles Times reported that the messages allegedly discussed favoring some creditors and “wip[ing] out” claims by others. McGraw’s production-company spokesperson denied the accusation and said an appeal would be filed.
Chapter 11 and Chapter 7 in this case
| Issue | Chapter 11 before conversion | Chapter 7 after conversion |
|---|---|---|
| Who controls the estate | Merit Street’s management remained involved in the reorganization process. | An independent trustee is to take control of estate administration and asset sales. |
| Main objective | Reorganize the company’s finances and operations. | Liquidate remaining assets and administer the proceeds and claims through the bankruptcy case. |
| Operating assets | Could be part of a proposed path to keep the business operating, subject to the bankruptcy process. | Can be sold under court supervision; the ruling puts the network’s operating structure and media library at risk. |
| Creditor process | Creditors had claims in a case framed around reorganization. | The trustee is responsible for administering the estate for creditors; the available reporting does not establish how much creditors will recover. |
The conversion changes the goal from trying to reorganize Merit Street to winding up the estate. It does not, by itself, settle every creditor or contract dispute.
Rank #2
- Author: McGraw, Dr. Phil.
- Publisher: Free Press
- Pages: 336
- Publication Date: 2003-09-09
- Edition: First Edition
How Merit Street reached bankruptcy
Merit Street Media launched in April 2024 as a joint project involving McGraw’s Peteski Productions and Trinity Broadcasting Network (TBN). After mounting losses, the company filed for Chapter 11 protection on July 2, 2025. The Los Angeles Times reported that Merit Street had cut staff, halted original production and listed liabilities of at least $100 million when it sought protection. That is the amount reported by the Times in 2025, not a figure for eventual creditor recoveries.
The bankruptcy came amid a declining syndicated-television market and clashes with a distributor, according to the Times. After the filing, McGraw’s company sued TBN and TBN countersued. Those disputes continued alongside the bankruptcy case.
Key dates in the case
- April 2024: Merit Street Media launched.
- July 2, 2025: Merit Street filed for Chapter 11 protection.
- September 16–29, 2025: The court held its evidentiary trial over five days.
- October 28, 2025: Judge Everett ordered conversion to Chapter 7 liquidation.
- November 10, 2025: The memorandum explaining the ruling was filed in the case record.
Does this mean Dr. Phil personally went bankrupt?
No. The bankruptcy filing and liquidation order apply to Merit Street Media, the company. The reporting and court findings described here do not establish that McGraw personally filed for bankruptcy. The case does address his conduct in relation to the company and its bankruptcy estate, which is distinct from a personal bankruptcy filing.
Quick Recap
Best Value
- Love Smart: Find the One You Want-Fix the One You Got
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
