Owned by Northwest Broadcasting System, Inc., the station closed due to lack of capital to continue operations.

[2] On the night of December 14, 1960, at sign-off, vice president and chief engineer William Barclay appeared to inform viewers of the station's closure and expressed hope that a new owner would appear to keep KNBS in operation; that same week, the station filed for bankruptcy listing $169,000 in liabilities and $90,000 in assets, and a receiver was appointed to manage the process of selling it to the highest bidder.

[2][5] A high bid of $50,000, including the assumption of $27,000 in outstanding liens, for KNBS was placed by the Alert Acceptance Corp. of Portland, Oregon, a financial and property management business, and approved in January 1961.

[6] The sale to Alert was voided in June, after the company never paid the bid; additionally, it had not filed for Federal Communications Commission approval to transfer the license from Northwest Broadcasting System.

[7] While receiver Eugene Golden noted interest from others at the time that Alert's sale was voided,[7] the station was never reactivated.