Dr. Phil McGraw has built his entire career around giving others tough advice, but now it seems the man who made a fortune telling people how to fix their problems is facing a crisis of his own. The television psychologist’s media empire has been thrown into turmoil after a Texas bankruptcy judge ruled that his company, Merit Street Media, would be forced into liquidation. What was meant to be a reorganization under Chapter 11 has now turned into a Chapter 7 case, and the implications for McGraw’s business future are severe.
According to reports from Variety and The Hollywood Reporter, the decision came after U.S. Bankruptcy Judge Scott Everett expressed deep concerns over how McGraw and his team had handled the bankruptcy process. The judge cited alleged wrongdoing and suspicious activity tied to the filing, including the deletion of key messages and possible attempts to manipulate the process for McGraw’s personal benefit. Everett said he had “never seen a case like this,” calling it an “anomaly,” and made it clear that candor to the court is critical — something he believed was lacking in this situation.
The case has drawn intense public interest not only because of McGraw’s fame but because of the staggering amount of money and reputation at stake. Merit Street Media, which McGraw launched to replace CBS as the home of his long-running talk show, was supposed to be the centerpiece of his next media chapter. Instead, it has become a symbol of how quickly a dream can unravel when business relationships break down and trust collapses.
Court filings reveal that the trouble began with the very foundation of Merit Street Media. In 2023, McGraw’s production company, Peteski Productions, entered into a joint venture with the Christian broadcaster Trinity Broadcasting Network, often referred to as TBN. The deal was structured so that Trinity owned 70 percent of the company, while McGraw retained 30 percent. Together, they envisioned a sprawling television network featuring original shows, documentaries, and, of course, a new iteration of the “Dr. Phil” program that had made McGraw a household name for over two decades.
But despite that grand vision, the relationship between McGraw and Trinity soured quickly. According to court records, Trinity agreed to invest heavily in Merit Street Media through production, distribution, and loan services. By the end of June, the network said it had spent more than $100 million, and at one point, was pouring $13 million a month into the venture just to keep production moving. In return, McGraw’s Peteski Productions was supposed to produce a steady stream of content — including 160 new episodes of the talk show within a six-month period — but Trinity claims those promises were never fulfilled.
The Christian media group accused McGraw of failing to deliver the viewership numbers, advertising revenue, and commercial partnerships that had been projected. As frustration mounted, Merit Street filed for bankruptcy on July 2. That filing would prove to be the turning point in the entire saga. It came just one day after McGraw and Peteski Productions quietly formed a new company called Envoy Media, and that timing became a centerpiece of the court’s concern.
Judge Everett questioned whether the bankruptcy filing was made in good faith, especially after evidence surfaced suggesting McGraw had used the process to protect his own interests while leaving his partners in the lurch. The most damning piece of evidence appeared to be a private text message where McGraw described what he called a “gangster move.” According to documents obtained by USA Today, the message outlined a plan to use a Chapter 11 bankruptcy to turn Trinity into a “passive minority investor,” effectively reducing their influence and control over Merit Street.
The court later found that McGraw deleted an “unflattering” message referencing this so-called “gangster move,” and that act of deletion raised further suspicion. Judge Everett said he had seen many complex cases in his career but none quite like this one. The evidence painted a picture of a man who, rather than cooperating with his creditors and partners, may have been trying to outmaneuver them. In one of the court hearings, Everett remarked that McGraw “believed he was calling the shots,” suggesting that the TV host might have assumed his celebrity status could influence the process.
For McGraw, however, the story is very different. He has denied every accusation of impropriety and insists that the bankruptcy was not a strategic ploy but a last-ditch effort to save Merit Street from financial collapse. In a statement shared with both Variety and THR, McGraw said, “I’m doing everything I can to keep Merit up and running. This theory, that this was all a ploy to set up Envoy Media, is absurd.” His team has vowed to appeal the ruling, arguing that the judge’s comments misrepresented his intentions and actions. “We respectfully disagree with the court’s ruling,” a spokesperson for Peteski Productions said.
Despite McGraw’s public insistence that he acted responsibly, the details that have emerged from the case suggest a tangled web of mistrust and mismanagement. Trinity, which had poured massive sums of money into Merit Street, claimed that McGraw was more interested in paying his own company, Peteski Productions, than fulfilling obligations to other creditors. The court’s findings backed that concern, noting that McGraw appeared to have prioritized certain financial relationships while “opting out of paying unfavored creditors,” including Trinity and the sports organization Professional Bull Riders, which had partnered with the network for programming and promotional deals.
As these financial disputes escalated, the courtroom drama deepened. Trinity countersued McGraw, alleging fraud and breach of contract. In response, McGraw’s legal team filed their own suit, accusing Trinity of abusing its power as a controlling shareholder. Around the same time, Professional Bull Riders filed an emergency motion asking the court to determine whether Merit Street’s bankruptcy had been filed “in bad faith.” It was an extraordinary move that highlighted just how fractured the partnerships around McGraw’s media venture had become.
To make matters worse, Trinity’s lawsuit claimed that McGraw had misrepresented the financial health and viewership success of the network. The broadcaster said it was led to believe the project would generate strong returns and viewership numbers consistent with Dr. Phil’s previous success on CBS, only to discover those figures had been overly optimistic. Court records indicate that by the time Trinity realized the extent of the losses, they had already spent tens of millions with little to show for it. The company said that even though production expenses were skyrocketing, McGraw had not delivered a single episode under the contractual agreement.
McGraw’s camp disputes that point, arguing that Merit Street actually aired 214 new episodes — though the question of whether those shows were part of the Trinity contract remains unresolved. According to McGraw’s representatives, Trinity’s financial troubles were not his fault but the result of mismanagement on their end and unrealistic expectations about how quickly the network could turn a profit.
Behind the courtroom battles lies a deeper question about trust, ego, and control. For decades, Dr. Phil was one of daytime television’s biggest names, commanding millions of viewers and shaping public conversations around mental health, family conflict, and personal growth. When he left CBS, many assumed his next move — launching his own network — was a natural evolution. But the Merit Street collapse has cast a shadow over that legacy. It suggests that behind the camera, McGraw may have struggled with the same issues he often coached others through: accountability, transparency, and the consequences of overconfidence.
Judge Everett’s decision to convert the case to Chapter 7 means that Merit Street Media will now be dismantled piece by piece. Its assets will be sold off to repay creditors, and McGraw will lose control over the company he built. The ruling also raises questions about Envoy Media, the new company McGraw founded just before the bankruptcy filing. Critics argue that the timing makes it look like an attempt to shift valuable assets into a fresh entity, free of Merit Street’s mounting debts. McGraw, however, insists Envoy Media is a separate venture with no connection to the bankruptcy.
The entire ordeal has become a public spectacle, partly because of McGraw’s fame and partly because of the irony of the situation. The man who once told millions of viewers to “take control of their lives” now finds his own professional life being controlled by the courts. The phrase “gangster move,” once used privately and perhaps flippantly, has now become a haunting symbol of the scandal — a reminder that words can come back to haunt even the most experienced media personalities.
For now, McGraw and his legal team are preparing their appeal, hoping to overturn Judge Everett’s decision or at least regain some control over the liquidation process. It will not be easy. Bankruptcy appeals can take months, even years, and in the meantime, the trustee appointed to oversee Merit Street’s liquidation will begin sorting through assets, contracts, and debts to determine how to distribute what remains.
The future of Dr. Phil’s media ventures remains uncertain. If the liquidation goes forward as planned, his reputation as a businessman could take a lasting hit. While McGraw has built an empire on his brand of tough love and no-nonsense advice, this chapter of his career paints a different picture — one of a man entangled in corporate infighting, legal strategy, and allegations of financial manipulation. The story of Merit Street Media may one day become a cautionary tale about what happens when ambition outpaces integrity, or when a media mogul assumes his celebrity status can bend the rules of business.
Still, Dr. Phil’s public image has survived controversies before. His departure from CBS was once seen as risky, yet he turned it into an opportunity to create something new. Whether he can do that again — under the cloud of bankruptcy and accusations — remains to be seen. What is clear is that this saga has exposed a side of McGraw few have ever seen: the businessman who gambled on his own name, and may now lose it in the process.
As the legal proceedings continue, observers are left to wonder what exactly went wrong. Was it poor business planning, misplaced trust, or deliberate deception? The truth may take time to emerge. But one thing is certain: the “gangster move” that McGraw once boasted about has now become the very move that could destroy the empire he spent a lifetime building. And in a courtroom far removed from the bright lights of daytime television, Dr. Phil McGraw is learning a hard lesson about power, accountability, and the cost of playing too close to the edge.