“Logo text Dr. Phil has lost a trial that will decide the fate of his media startup’s bankruptcy, a case that involved allegations that he plundered the company to set up his new venture. US Bankruptcy Judge Scott Everett on Tuesday turned down a bid by Dr. Phil to keep the case in Chapter 11”, — write: www.hollywoodreporter.com
Dr. Phil has lost a trial that will decide the fate of his media startup’s bankruptcy, a case that involved allegations that he plundered the company to set up his new venture.
US Bankruptcy Judge Scott Everett on Tuesday turned down a bid by Dr. Phil to keep the case in Chapter 11, which would have allowed him to wipe out partner-turned-adversaries owed money that opposed the bankruptcy. It will now proceed as a Chapter 7 liquidation. A trustee will oversee the sale of Merit Street’s assets, including what’s left of its media library, and litigation over whether the TV host swindled Trinity Broadcasting under a $500 million, 10-year deal.
In the decision, the court pointed to evidence indicating that Dr. Phil, whose surname is McGraw, deleted incriminating text messages and that he’d try to game the bankruptcy by paying certain favored creditors over others.
“Candor to the court is critical,” Everett said in the bench ruling.
McGraw’s Merit Street is simultaneously in bankruptcy court and suing Trinity Broadcasting for breach of contract over its downfall. At the same time, the TV host is launching an entirely new venture called Envoy Media.
After Merit Street filed for bankruptcy, Trinity Broadcasting sued the company, arguing that McGraw initiated the proceedings to protect his own interests. The trial determined the legitimacy of the company’s Chapter 11 filing.
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