KSFM faced a series of legal issues in the early 1990s. In 1990, KWOD owner Ed Stolz filed a libel lawsuit against Genesis Broadcasting for $10 million. According to the suit, on June 30, 1989, Collins disparaged KWOD on-air as being anti-gay and anti-African American; this resulted in lost advertisers, threats to station staff, and a drop in ratings. Collins, in turn, claimed his remarks were in response to anti-gay comments by KWOD morning host Pat Garrett. In late 1993, Collins sued Genesis Broadcasting for wrongful termination, seeking at least the approximate $335,000 value of the remaining two years of his contract. He alleged he was fired for threatening to report drug use in the workplace and associated abusive behavior by supervisors. Genesis responded that Collins was dismissed because of declining ratings. This dispute threatened to derail the pending merger of Genesis with Secret Communications. Royce International, then-owner of KWOD, petitioned the Federal Communications Commission (FCC) to investigate the drug use allegations, as well as resolve issues related to a previous petition involving Genesis' alleged interference in Royce's business activities. The merger ultimately was approved, finally closing on August 1, 1994.