U.S. Bankruptcy Judge Scott Everett on Tuesday turned down a bid by Dr. Phil to keep the case in Chapter 11, which would’ve 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,…
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