Parmalat USA, a subsidiary of the huge, insolvent Italian dairy company, filed for bankruptcy protection Tuesday in New York.

In court papers, the company said the well-publicized problems at the parent company prompted suppliers to demand immediate cash payments and led to a cut-off of credit lines.

Parmalat employs nearly 1,300 people in the United States, who processed milk from more than 800 dairy farms.

The main Parmalat company in Italy collapsed in scandal in late December amid allegations of massive fraud and a multi-billion-dollar hole in its balance sheet.

Many executives associated with the Italian company have been detained for questioning, although none have been formally charged with a crime.