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 eliminating foods such as bread and pasta in favor 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 trim.

However, the Atkins diet horrified many in the medical profession because it emphasized the consumption of fatty foods at the expense of fruit and vegetables.

Demand also dropped after 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 to take place today in a U.S. bankruptcy court. Chapter 11 gives a company time to reorganize itself by giving it protection from its creditors.

The company, which is privately owned, owes $300 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 $25 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 has "adjusted our organization 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 Atkins.

Administrators were appointed to the U.K. 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.

A report published by market analysts Mintel in October highlighted the high drop-out rate of low-carb diets.

Just 2.8% of those questioned by Mintel were currently on a low-carb regimen, such as the Atkins diet. Another 10% said they had followed one of the diets but had given up, with only 1% willing to try it again.

In June, the Advertising Standards Authority called for an ad for the Atkins diet to be pulled because its claim that followers could "enjoy a healthier lifestyle" could not be proven.

Source: Press Association (U.K.)