Alpha Red Has Assets to Be Liquidated, Trustee Says
The trustee, Douglas Brickley, says creditors have until Sept. 14 to file a claim with the U.S. Bankruptcy Court in Houston.
Alpha Red, which hosted numerous adult sites on its servers, left its clients in the dark after it filed Chapter 11 about two years ago, listing about $10 million in debt. Some in the online adult biz said Alpha Red was seeking business right up to the filing.
The bankruptcy filing was later switched to Chapter 7 and subsequently its CEO and founder, James McCreary, was arrested by the U.S. Marshal's Service after he failed to appear at bankruptcy proceedings in January. McCreary was found in contempt.
Alpha Red, according to documents obtained by XBIZ, had gross revenue of $8.2 million in 2008, $9.8 million in 2007 and $5.5 million in 2006.
The company is primarily owned by McCreary, who holds an 82 percent share, with Netherlands-based V.S.N. Produktie B.V. holding an 18 percent share.
Much of Alpha Red's assets that could be liquidated include about two dozen servers, including one that has a potential value of $415,000. The trustee noted that company assets of "unknown value" disappeared in late 2008 at both of Alpha Red's offices in Dallas and Houston.
A statement filed with the court also shows large transfers of company cash in late 2008 by McCreary to a Hong Kong bank account with McCreary listed as payee. Between Sept. 25, 2008, and Oct. 7, 2008, numerous wire transfers to his Hong Kong bank account totaled $2.8 million.
In December 2008, Alpha Red filed for bankruptcy.