During the license transfer process, program distributors Twentieth Century Fox Television, MCA Television, and Paramount Television sued Channel over "billed and unpaid license fees" totaling $387,342 (equivalent to $ in ), forcing Channel into Chapter 7 bankruptcy on October 24, 1986, later converted to Chapter 11 by November. Embassy Television also filed a petition with the FCC against the deal, claiming a loss of over $3 million in broken contracts by WCLQ-TV for the production company's situation comedies and movies. Channel also owed $10 million to bank Manufacturers Hanover. Worldvision Enterprises later sued Channel for $1.9 million in unpaid bills (equivalent to $ in ) in late April 1987. Channel had already sold KAIT and KPLC to Cosmos Broadcasting in early October 1986, exiting broadcasting altogether.
