The company that promoted the low-carb Atkins diet and sparked a worldwide craze has filed for bankruptcy protection in the United States.
Atkins Nutritionals took the step after people wanting to lose weight increasingly turned their backs on a diet that focused on cutting out foods such as bread and pasta in favour of protein-rich meat and cheese.
The company was set up in 1989 by Dr Robert Atkins and the diet gained international fame after a host of celebrities claimed it helped them stay in trim. But the Atkins diet horrified many in the medical profession because it emphasised the consumption of fatty foods at the expense of fruit and vegetables.
Demand also dropped after Dr Atkins died in 2003 and rival multinational firms started promoting similar products, such as low-carb bars of Kit-Kat and Rolo from Swiss food giant Nestle.
A spokesman for Atkins said a hearing on its filing was due today in a US bankruptcy court. Chapter 11 gives a company time to reorganise itself by giving it protection from its creditors.
The company, which is privately owned, owes £ 169 . 7 million and is understood to have reached an agreement with the majority of its lenders to give them equity in exchange for lower debt. It has received £14.1 million in financing to operate during the bankruptcy proceedings, which will not affect its day- to- day operations.
President and chief executive Mark Rodriguez said the New York-based company had "adjusted our organisation to accommodate a smaller business" in the past year.
It will promote its brands "more broadly for consumers who are concerned about heath and wellness," he said.
After it leaves bankruptcy, Atkins will focus on its nutrition bars and shakes.
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, along with the estate of Dr Atkins.
Administrators were appointed to the UK arm of Atkins Nutritionals in March after the business - based at Ashby-de-la-Zouch in Leicestershire - was hit by poor sales and amassed heavy debts.