One of the nation’s oldest firearms manufacturers and makers of America’s first mass-produced revolver has asked its investors to take a 70 percent pay cut or the company will be forced into bankruptcy.

According to financial reports, Colt Defense LLC told investors that it would need to restructure its $250 million bond debt with a new issue of bonds at a higher interest rate but longer loan term at 30 percent of their original value in order to stay in business. If the bondholders don’t agree to that plan, the company offered a so-called “pre-packaged” bankruptcy agreement that would avoid a lengthy court fight and allow Colt to restructure quickly.

“The exchange offer and the issuance of the new notes are designed to reduce the overall amount of Colt’s debt, reduce total cash interest payments, extend the maturity for the debt exchanged, and place Colt in a better position to attract new financing in the years to come,” the company said in an April 14 release announcing the move. “The company believes the exchange offer will also improve its performance and customer relations by addressing the key issues relating to Colt’s viability as a going concern.”

It’s unclear how bondholders will take the deal, as Colt is requiring a near unanimous decision from investors on either the new bonds, or “prepack” bankruptcy. Some analysts think the beleaguered company is trying to back money managers into a corner by threatening a costly bankruptcy fight with one of America’s most storied brands.

The terms require an agreement by midnight May 11.

“Their move … is extremely risky: if they can’t get the bondholders to accept the 70-30 haircut or the prepackaged bankruptcy, bondholders can and probably will sue, plunging the … company into Chapter 11 bankruptcy or even Chapter 7 liquidation,” wrote the Weaponsman blog. “They’re gambling that the bondholders’ fear of being left holding a bag containing much less than 30 percent of the company’s capitalization, divided among the holders of $330 or so million in secured and unsecured debt, will be stronger than their indignation at being 70 percent expropriated so the managers and hedges can be made whole.”

Colt has been facing financial troubles for years, with a warning in November 2014 it would likely default on its nearly $11 million debt payment due this month. The company’s bottom line took a hit as military and government agency spending has declined, and an initiative to open a manufacturing facility in Kissimmee, Florida, foundered.

The Wall Street Journal reports that Colt’s anticipated revenue for 2014 came in at $190 million, 30 percent less than 2013.

“When it did give a nod to the consumer market, Colt mostly focused on its classic revolver handguns … [and] 1911 pistol, one of the most popular categories of handguns,” Rich Duprey from the Motley Fool wrote. “But in 2014, the market weakened considerably for all players, and for a company plagued by costly maneuvers, like the restructuring and reversal of its manufacturing and defense businesses, Colt has been unable to cope.”

In March, Colt named Paul Spitale as the new chief of commercial sales and appointed Kenneth Juergens as head of government and military sales, a move Colt called “a new customer-centric design for sales and marketing” at the company.