In April 1997, the company's owners sought bankruptcy protection after losing a court battle to the IRS that required the Buena Park location to pay $7.5 million and the Orlando location to pay $2.5 million in back taxes. According to the IRS, Medieval Times improperly deducted royalties, loan interest, and management fees in the 1987 and 1989 tax years. When asked why the company was filing for bankruptcy the company's bankruptcy lawyer, Alan Friedman, said, "one of the primary reasons for filing was to prevent the IRS from beginning to seize any assets."