Creditor alleges that Dr. Phil’s former media company’s bankruptcy filing in bad faith
Well-known media personality Dr. Phil McGraw is facing allegations that the Chapter 11 bankruptcy filing for his Merit Street Media company was done in “bad faith” to avoid creditors and to funnel money in to his new venture, Envoy Media.
On Wednesday, Fort Worth-based Professional Bull Riders, a creditor in the bankruptcy case, filed an emergency motion in the Northern District of Texas bankruptcy court compelling Merit Street to produce documents before a July 19 hearing.
Attorneys for Merit Street Media filed a response stating that the request from PBR was not reasonable and placed an undue burden on Merit Street.
PBR requested a wide range of documents, including emails, text messages, meeting minutes and audited and unaudited financial reports.
Attorneys for Merit Street called the requests “overbroad” in court documents and stated that meeting minutes and financial reports were already “produced” before PBR filed its emergency motion.
PBR’s Motion to Compel is premature because PBR filed it without meeting and conferring with Merit Street, attorneys for Merit Street argued in court documents. They said PBR’s motion to compel seeks numerous documents that Merit Street had already produced before PBR filed its motion — something Merit Street could have explained if PBR had properly met and conferred with Merit Street, they aruged in court documents.
The legal battle grew out of a July 2 Chapter 11 bankruptcy filing. Only July 14 McGraw announced Envoy Media, a new company focusing on live programming and citizen journalism. PBR alleges the company was formed July 1.
At the same time Merit Street Media filed for bankruptcy, the company sued its distribution partner, Trinity Broadcasting Network, alleging that TBN destroyed McGraw’s media company, forcing it to file for bankruptcy.
In June the Dr. Phil Show was placed on an “indefinite hiatus,” according to a LinkedIn post by a former employee.
The company was also beset with layoffs.
Professional Bull Riders also cut ties with Merit Street stating that the company did not pay licensing fees.