AlphaRed Files for Bankruptcy

THE WOODLANDS, Texas - Adult hosting company AlphaRed has filed for bankruptcy in Texas, just months after the company and its owner were named in a lawsuit filed by Microsoft and the Washington State attorney general.

According to Web Host Industry Review, the company is claiming more than $10 million in liabilities. Tempe, Ariz.-based CWIE Holding Company had made an effort in October to acquire all of AlphaRed's hosting assets, but that deal fell through.

AlphaRed shut down in October after being named in the lawsuit, which was filed Sept. 16. Also named were James Reed McCreary IV of The Woodlands, Texas, owner of AlphaRed, and another of his companies, Branch Software.

The suit alleges the Registry Cleaner XP Program, created by Branch Software, was used to persuade surfers to purchase the program for $39.95. Pop-up windows "alerted" Internet users they needed to download the program, which then installed malware.

The bankruptcy filing says AlphaRed owes $826,000 to the IRS, $1.6 million to Cogent Communications and more than $799,000 to Level 3 Communications.