Atkins diet company Atkins Nutritionals has filed for Chapter 11 bankruptcy in the New York bankruptcy court, the Reuters news agency reported.

Atkins and other low-carb regimens such as the South Beach and Zone diets were so popular from 2002 through 2004 that the trend was blamed in part for the bankruptcies of pasta maker New World Pasta Co. and Twinkies and Wonder Bread maker Interstate Bakeries Corp.

At the same time, however, the diet received widespread criticism from nutritionists who said it encouraged people to overeat fatty foods like bacon.

The low-carb craze peaked in early 2004, when over 9% of US adults claimed to be on such a diet, according to market research firm NPD Group. That figure declined to 2.2% last month.

"The low-carb trend has sort of died on the vine," said Bob Goldin, executive vice president at Chicago-based food industry consulting firm Technomic Inc.

Atkins has said demand for its products began to slump at the end of 2004 as rival food companies, including heavyweights like Kraft Foods flooded the market with everything from low-carb Oreo cookies to cereal.

At the same time, Atkins faced increased scrutiny by critics. In particular, the death of company founder Robert Atkins after a fall in April 2003 led to much negative publicity when reports claimed he had been overweight and suffered from a heart condition.

Last fall, the New York-based company hired a turnaround specialist and cut jobs to boost efficiency. It also brought in new management -- though former H.J. Heinz Co. executive Neil Harrison left earlier this year after just three months at the company's helm.

Mark Rodriguez, who became Atkins' chief executive in June, said in a statement that the company has "adjusted our organization to accommodate a smaller business." He was not available for further comment, a spokesman said.

For the 12-month period ended Dec. 31, 2004, Atkins said it had total assets of $301m and liabilities of $325.1m, according to court documents. For the same period, it recorded a loss of $340.9m, including an asset impairment charge.

The company said it secured $25m in debtor-in-possession financing arranged by UBS. Five other potential lenders refused to extend credit to the company, Atkins Nutritionals said in its filing.

Atkins said the "overwhelming majority" of its lenders had agreed to a prearranged plan to restructure its debt, and it would file a reorganization plan shortly for bankruptcy court consideration. Its lenders have agreed to receive equity in the company in exchange for reducing debt, the company said.