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.

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 tr

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