Atkins Nutritionals Inc., the company that promoted low-carb eating into a national diet craze, filed for Bankruptcy Court protection Sunday, a company spokesman said.
Atkins has been hurt as its namesake diet, which focuses on eliminating carbohydrates such as bread and pasta as a way to shed weight, has become less popular.
The diet quickly became one of the most popular in U.S. history, spawning numerous derivatives and a virtual cottage industry of low-carb regimens -- but also drew criticism from many experts for its focus on fatty foods and low fruit and vegetable consumption.
A hearing on the prearranged Chapter 11 filing was scheduled for today in U.S. Bankruptcy Court, spokesman Richard Rothstein said. The privately held company, founded in 1989 by Dr. Robert C. Atkins, said it had reached an agreement with the majority of its lenders to give them equity in exchange for lowered debt.
President and Chief Executive Mark S. Rodriguez said the company had in the last year "adjusted our organization to accommodate a smaller business" and would promote its brands "more broadly for consumers who are concerned about heath and wellness."
After it leaves bankruptcy, the Ronkonkoma, N.Y.-based company will focus on its nutrition bars and shakes, Rodriguez said in a statement.
Private equity firm Parthenon Capital acquired a majority stake in Atkins in October 2003. Goldman Sachs Capital Partners owns a smaller stake in the company, as does the estate of Robert Atkins, who died in 2003 from injuries he suffered in a fall.
The company said its bankruptcy filing would not affect its day-to-day operations.