New World Pasta Files Chapter 11

Low-carbohydrate diets claimed another casualty Monday, as New World Pasta Co. -- which makes Ronzoni, Creamette and other brands -- filed for bankruptcy protection.

New World’s sales dropped to $330 million last year from $400 million in 2001, according to court papers and regulatory filings. The Harrisburg, Pa.-based company, majority-owned by private equity firm JLL Partners, said it had about $450 million in debt in filing for protection under Chapter 11 of the bankruptcy code.

New World is the latest food company whose sales have been hurt by the diet advocated by the late Robert Atkins. Krispy Kreme Doughnuts Inc. on Friday cut its annual profit forecast and said first-quarter earnings were lower than expected as the trend reduced demand. Interstate Bakeries Corp., the largest U.S. wholesale baker, said last month that it might not meet bank loan requirements after sales fell last quarter.

One analyst doubted that New World would emerge whole.

“The company has long-term structural problems: a high cost position, a declining market because of the popularity of the Atkins diet, and two aggressive competitors in American Italian Pasta and Barilla,” said Duncan Yin, a debt analyst at CRT Capital Group in Stamford, Conn.