Aug 8, 2005Atkins Nutritionals Files for Bankruptcy
Atkins Nutritionals, the company behind the popular low-carbohydrate Atkins Diet, has filed for bankruptcy court protection.
The company was founded by the late nutrition guru Robert C. Atkins. Atkins died in 2003. The majority owner now is Parthenon Capital LLC, with smaller shares of the company held by Goldman Sachs Capital Partners and the Atkins estate.
According to news reports, the Atkins company owes $300 million in outstanding principal and interest. 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. The privately held company, founded by Atkins in 1989, said it had reached an agreement with the majority of its lenders to give them equity in exchange for lowered debt. After it leaves bankruptcy, the Ronkonkoma, N.Y.-based company will focus on its nutrition bars and shakes, the company said in a statement.
The diet had a wide following and was one of the most popular in U.S. history. Although it had wide popularity, the diet drew criticism from experts for its focus on fatty foods and low fruit and vegetable consumption.
The Healthy Potato campaign was created by the United States Potato Board to combat negative perceptions caused by the diet.
In its press release, Atkins emphasized that the filing will not impact day-to-day operations.