Dr. Phil McGraw’s latest business venture is not going according to plan.
In fact, the once-beloved TV personality is now dealing with legal drama that could have major ramifications.
In April of 2024, McGraw launched a media company and television network called Merit Street Media, which filed for bankruptcy less than a year later.
Now, a judge is accusing Phil of attempting to deceive the court during bankruptcy proceedings.
Judge blasts Dr. Phil amid bankruptcy proceedings
Merit Street Media filed for Chapter 11 bankruptcy, but this week, Judge Scott W. Everett of the U.S. Bankruptcy Court for the Northern District of Texas ruled that the company only qualified for Chapter 7 liquidation and would therefore need to liquidate its assets.
According to The Hollywood Reporter, a trustee will oversee both the sale of Merit Street Media’s media library and litigation over whether broadcast partner Trinity Broadcasting breached its contract with the company.
The judge specifically singled out Phil for his alleged deletion of a text message that was part of discovery in the case.
Everett claims that McGraw deleted an “unflattering” text message, a tactic he described as a “gangster move.”
“Mr. McGraw’s actions violated not only the discovery order…but also a broader principle that the debtors, board members, or de facto officers or agents should not destroy property of the estate to help them in pending litigation,” Everett said.
With a Chapter 7 trustee, he added, “Creditors can have faith that the process will play out fairly and neutrally.”
“Dismissal, on the other hand, would allow Mr. McGraw to pay his favored creditors and not pay his unfavored creditors, as his own deleted text makes clear he wants to do,” the judge continued, adding:
“Dismissal would also allow the debtor or friendly creditors to file another bankruptcy case in a different jurisdiction to try to get different rulings that favor Mr. McGraw and his interests, including on the pending sanctions motion that I’ve yet to rule on,” he said.
What’s next for Dr. Phil?
A spokesperson tells THR that Phil and his company intend to appeal the judge’s decision:
“We take great exception to the court’s improper assertions regarding the alleged destruction of evidence, which simply did not happen,” the statement read.
“We will not let this stand given all that Dr. Phil and Peteski Productions have done to protect Merit Street employees, distributors, and other interested parties and to resolve this unfortunate situation.”
We will have further updates on this developing story as new information becomes available.