Diet leader Atkins facing bankruptcy
Atkins has been hurt by waning popularity of its namesake diet, which focuses on eliminating carbohydrates.
Published: Monday, August 1, 2005 at 6:01 a.m.
Last Modified: Sunday, July 31, 2005 at 11:51 p.m.
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 by waning popularity of its namesake diet, which focuses on eliminating carbohydrates such as bread and pasta as a way to shed weight. 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 Monday 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.
Atkins owes $300 million in outstanding principal and interest, Rothstein said.
The company said it had received $25 million in financing to operate during the bankruptcy proceedings, which it said would not affect day-to-day operations.
President and CEO Mark S. Rodriguez said the company has in the past year ``adjusted our organization to accommodate a smaller business'' and will promote its brands ``more broadly for consumers who are concerned about health 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.
A private equity firm, Parthenon Capital LLC, acquired a majority stake in Atkins in October 2003.
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