When Jody Gorran heard Atkins Nutritionals had filed for bankruptcy, the Delray Beach, Fla., businessman was practically giddy.

For 2 1/2 years, he had followed the Atkins diet religiously, shedding 10 pounds and keeping it off, without any of the cravings, fatigue or headaches others had reported.

"I thought it was a wonderful diet — all the way up until I realized that it had given me heart disease and almost killed me," says Gorran, 54.

Last year, Gorran sued the company to put warning labels on its products. Doctors and other critics say the once wildly popular low-carbohydrate diet can produce dangerous cholesterol levels in those who are "fat-sensitive" — and that for everyone, high levels of saturated fat and protein can increase the risk of gout, kidney and liver disease, osteoporosis, and breast and colon cancer.

So it's no surprise that when Atkins filed for Chapter 11 — blaming $300 million in debt, dwindling demand and a glut of low-carb competition — doctors and dietitians were quick to pronounce the fad dead. Certainly the mighty had fallen.

As recently as 2003, low-carb products were being introduced at a head-spinning rate. Major food manufacturers and restaurants were jumping aboard the bandwagon with predictions that low-carb fare would soon mushroom into a $15 billion- to $25 billion-a-year industry. Suddenly there were low-carb cookies, low-carb candy, even low-carb bread and low-carb beer.

"Americans are infatuated with low-carbohydrate dieting," declared the International Food Information Council in late 2004 — just before the whole thing started its downhill slide.

Although studies showed the diet helped followers lose weight — and quickly — the Atkins dropout rate was high. Few managed to stay on the diet for an entire year, complaining that, eventually, even steak and eggs can become boring. Others suffered unpleasant side effects, from bad breath to constipation to dizziness and irregular heartbeats. Some simply craved carbohydrates.

"Frankly, I would have expected the bankruptcy sooner," says Dr. Boyd Lyles, an internal-medicine specialist and director of the HeartHealth and Wellness Center in Dallas, where he has long been a vocal critic of the Atkins diet. "In the long run, people are not going to give up carbohydrates. If they manage to stay on (Atkins) long enough to achieve their target weight, they tend to feel like they've reached an end point, and they'll go back to eating normally. They can't just eliminate an entire food group."

Atkins executives, who have yet to settle the lawsuit over warning labels, say they hope the company will emerge from bankruptcy, and Atkins derivatives — such as the South Beach Diet — remain strong. In fact, low-carb may regroup as the "smart-carb" way of life.

Dan Fraser, a 51-year-old Orlando, Fla., real estate agent and paralegal, credits Atkins for his physical salvation.

Two years ago, he weighed 425 pounds and was taking medication for high blood pressure. His doctor advised him to have gastric bypass surgery. Instead, Fraser turned to the advice of Dr. Robert Atkins, the now-deceased cardiologist whose diet plan was experiencing a renaissance after an initial splash in the 1970s.

Fraser shed his first 100 pounds while feasting on all the meat and cheese he wanted — and his cholesterol dropped along with the weight.

When he hit a plateau, he added exercise. "I knew the high-fat content of the diet was a concern," he says. "So I kept the low-carb premise, but I cut out the high fat and added a lot more vegetables." At 6-feet-1, he now weighs 230 pounds and still hopes to shed another 30 or 40.

"I'm on the right track," he says. "The principles of low-carb definitely work for me."

So why didn't they work for Gorran?

Amy Lanou, senior nutrition scientist for the Physicians Committee for Responsible Medicine, which is handling Gorran's suit against Atkins Nutritionals, says there are several problems. First and foremost, people will react differently to the same diet. One in three on a low-carb, high-saturated-fat diet will develop a serious cholesterol problem — even if they are losing weight.

After 2 1/2 years on the Atkins diet and suffering skyrocketing cholesterol and chest pains, Gorran went to a cardiologist who found a 99-percent blockage in a major artery. In October 2003, Gorran underwent immediate heart surgery.

"What's surprising to me is that it doesn't happen to everyone," Lanou says. "But even for those people whose cholesterol doesn't go up, I still think that type of diet is not safe."

Among medical experts, she is far from alone. Most doctors, continue to warn that a diet high in saturated fat is unhealthy.

But whether consumers will turn away because of health reasons, a craving for sweets or a waning attention span isn't clear. There's no reliable measure of how many low-carb devotees still exist.