Dr Phil McGraw's Merit Street Media (MSM) is at the centre of a heated bankruptcy hearing in Texas, as the television personality fights to move his troubled venture into Chapter 11 while continuing a breach of contract lawsuit against former partner Trinity Broadcasting Network (TBN). At a hearing on Tuesday, lawyers for McGraw argued that the bankruptcy was a last resort, with the 75-year-old host having 'fought it for months and months and months' to avoid starting over in his career.
Attorney Charles Babcock of Jackson Walker LLP told Judge Scott W. Everett that McGraw, best known for his work with Oprah Winfrey, 'did not want to have to go and start all over again'. Babcock said McGraw had 'tried everything he could to have his voice heard through Merit Street' and had been forced to build a new entity, Envoy, from the ground up after the partnership with TBN turned 'toxic'. The hearing comes less than a day after MSM filed a creditors-backed plan for a sale of media assets and a proposed global settlement.
TBN, led by Matthew Crouch, is seeking to have McGraw's July lawsuit and the bankruptcy move dismissed, and has countersued the TV personality over a $500 million distribution deal that soured soon after it was announced last year. TBN lawyer Mark Moore accused McGraw's side of 'bad faith' and 'grandstanding', arguing that the court should not allow the bankruptcy to proceed as a 'side show'. Both sides have traded accusations of brinkmanship, with the judge having to manage expectations and prevent the proceedings from spiralling into a 'mini-trial'.
Babcock asserted that TBN was 'in the process of silencing' McGraw's voice by refusing to comply with its distribution commitments. 'Now you can agree or disagree with his voice and what he says,' Babcock said. 'A lot of people agree. A lot of people find it fascinating. But it is a voice, and TBN was in the process of silencing that voice.' The hearing is expected to continue over the coming days, with the judge overseeing arguments over the potential settlement and the future of MSM.
