Diet giant Atkins in bankruptcy bid after business slims down

Published on Monday 1 August 2005 15:15

ATKINS Nutritionals, the firm behind the low-carb diet which split medical opinion, has applied for bankruptcy protection in the United States.

The firm was founded in 1989 by the late Dr Robert Atkins and promoted a diet replacing carbohydrates such as bread and pasta with proteins like meat.

A hearing on the prearranged Chapter 11 filing was planned for today in US Bankruptcy Court, a company spokesman said.

Chapter 11 allows a company to keep trading, but gives it protection from creditors in the hope that it can work out a rescue plan and put its finances in order.

The privately-held company said it had reached an agreement with most of its lenders to give them equity in exchange for lowered debt. The firm owes lenders some 170 million, according to court documents. It has secured funding of about 14m to operate during the bankruptcy proceedings, which it said would not affect day-to-day operations.

President and chief executive Mark Rodriguez said the company had in the past year "adjusted our organisation to accommodate a smaller business" and will promote its brands "more broadly for consumers who are concerned about health".

After it leaves bankruptcy, the company, based in New York, will focus on its nutrition bars and shakes, Mr Rodriguez said. Atkins has seen sales dwindle as a result and its UK operations went into administration earlier this year. Private equity firm Parthenon Capital acquired a majority stake in Atkins in October 2003.