AlphaRed Shutters Doors

THE WOODLANDS, Texas - Adult hosting company AlphaRed has officially closed.

Company officials sent a letter to clients on Tuesday, stating AlphaRed entered Chapter 7 bankruptcy that morning. The letter noted that actions would be taken to "liquidate the assets of AlphaRed and collect past due balances from AlphaRed's current and former clients."

"The business will not continue," the letter continued, adding that "all services including power, bandwidth, and technical support will be shut down" at 9 a.m. CST Dec. 24.

The troubled company has made headlines in the later part of 2008 after the company and its owner, James Reed McCreary IV, were among those named in a lawsuit filed by Microsoft and the Washington State attorney general.

The suit, filed on Sept. 16, alleges another of McCreary's companies, Branch Software, created the Registry Cleaner XP Program, which used pop-up ads to persuade Internet surfers to purchase the program for $39.95. The program was also sold through AlphaRed, the suit claims. Once installed, the program installed malware on the user's computer.

In its bankruptcy filing, AlphaRed claimed more than $10 million in liabilities. Tempe, Ariz.-based CWIE Holding Company made an offer in October to acquire all of AlphaRed's hosting assets, but the deal fell through.

McCreary was not immediately available for comment.