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Dr. Phil McGraw’s Merit Street Media has voluntarily filed for Chapter 11 bankruptcy in the Northern District of Texas due to an unresolved dispute with the mega Christian broadcast network, Trinity Broadcasting Network, earlier this week.
A source familiar with the situation exclusively tells PEOPLE the move appears to be part of an effort to preserve the value of the Merit Street brand, rather than a shutdown.
“Dr. Phil is deeply committed to the future of the brand and his employees,” the source says. “Despite the situation, he remains focused, energized and — true to form — as supportive and engaged with his team as ever.”
The source calls McGraw, who first rose to fame through appearances on The Oprah Winfrey Show in the 1990s, “one of the kindest, most dedicated people.”
“This is someone who clearly cares and always leads with integrity,” they added.
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McGraw’s Merit Street Media filed for bankruptcy on Wednesday, July 2, suing TBN, the network’s broadcasting partner, and TCT Ministries, Inc. in the process.
Merit Street Media’s complaint, which was obtained by PEOPLE, alleges that TBN “abused its position as the controlling shareholder of Merit Street to improperly and unilaterally burden Merit Street with unsustainable debt” and caused Merit Street to “pay or incur obligations to third parties in excess of $100 million.”
“The most egregious impact is TBN’s conscious and knowing choice to cause Merit Street to lose its national distribution by withholding distribution payments despite repeatedly acknowledging those distribution payments were 100% TBN’s sole responsibility,” the complaint alleges. “Simply put, as a result of TBN’s conduct, Merit Street has nowhere to send its broadcast signal and nowhere to air its programming no matter how great it may be.”
Merit Street Media claims TBN’s actions were “a conscious, intentional patter of choices made with full awareness that the consequences of which was to sabotage and seal the fate of a new but already nationally acclaimed network.”
PEOPLE has reached out to TBN and TCT Ministries, Inc. for comment on the lawsuit.
McGraw first announced plans for Merit Street Media in a post he shared to X (formerly known as Twitter) in November 2023.
“I’m coming back in primetime on a whole new network that’s called Merit Street Media,” McGraw said in a video announcement at the time.
“It’s my new network, but I’ve got some news that I want to share with you about that. This is actually not my network, this is our network,” he continued. “This is something that’s going to be focused entirely on what’s important to you. What you want to talk about, what you want to do and Dr. Phil is going to be on in primetime.”
The announcement came less than half a year after the end of Dr. Phil, his long-running daytime talk show, which premiered in 2002 and aired for 21 seasons.
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His new talk show, Dr. Phil Primetime, debuted in April 2024 when the network launched.
Other programming on the network centers around news and true crime.
Nancy Grace joined the network to host Crime Stories with Nancy Grace, while former Bachelor Nation host Chris Harrison and wife Lauren Zima joined with their show and podcast, Through the Drama with Chris & Lauren.
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Additional programming includes classic episodes of Dr. Phil, live sports programming, the Academy of Country Music Honors special and reruns of The Island With Bear Grylls and Steve Harvey’s talk show, Steve.
