How could an ATS be the worst route to go? Any algea growing in our tanks is a good thing.
Do yourself a favor, and google "allelopathy, macroalgae". You'll find lots and lots of reading to explain why algae growing in our systems, where we are trying to grow coral, is not a good thing. Here's just one link to get you started.
http://www.google.com/url?sa=t&rct=...8qmDBw&usg=AFQjCNHdDq3etn-56l_cfydRzLEb_hiQyQ
Unfortunately, it looks terrible.
Then why do we want it in our systems????
Why not give it an ideal place to grow where it won't be seen, and therefore prevent it from growing where you don't want it?
Why not keep the system clean where nuisance algae doesn't grow to dominate?????
Anyone who believes in the effectivness of using cheato believes this.
Read my signature line below about believers. (I actually borrowed that line from a moderator here on RC.

)
I just did a search, here on RC, for "chaeto dying". I got 20 pages of threads. Why are so many people having trouble growing Chaeto? IMHO and Experience, it's because we have better methods of nutrient control. Detritus removal, skimming, water changes, and filter media are just some of the examples of methods that work, and most of us employ some combination of these.
Chaeto must have a given level of nutrients within the system to grow and prosper. If the nutrient level isn't high enough, the algae simply falls apart, you end up with a continually shrinking wad of algae, and dying algae fragments littering the bottom of the sump/fuge. Some hobbyists "believe" so strongly in the magical powers of algae that even after finding themselves in this situation, they simply go buy more chaeto. These hobbyists aren't filtering their water with chaeto. They're adding nutrients to their systems. They're making their systems more dirty, not more clean. If chaeto is growing and prospering within the system, the system MUST be maintaining levels of nitrogen and phosphorous high enough to support that growth. This can easily exceed the comfortable nutrient levels for some delicate coral reef organisms, like stony corals. This nutrient level, combined with allelopathic substances from multiple species of algae, is likely the cause of poor coral health in the OP's system.
Out of time for now. Be back soon.:wave:
Peace
EC