Remington Arms Co., America's oldest gun maker, is preparing to file for Chapter 11 bankruptcy protection that could come as early as Sunday night and is in advanced talks for a sale to the Navajo Nation, according to a source familiar with the matter.

The Native American tribe is planning to vote to approve the deal as soon as Friday, the source said. The tribe previously had bid for Remington, planning to drop its most controversial semi-automatic rifles, the New York Times has reported.

U.S. retailers have placed restrictions on gun sales after school shootings, hurting manufacturers such as Remington. A Remington Bushmaster rifle was used in the Sandy Hook elementary school shooting in Connecticut in 2012 that killed 20 children and six adults, making it central to debates over gun policy.

The gunmaker has filed for bankruptcy before, in March 2018 after sales faltered and the company had trouble meeting requirements of its lenders.

Remington emerged from bankruptcy the same year, owned by its former creditors, including Franklin Templeton Investments and JPMorgan Asset Management.

The sources cautioned that the timing of the bankruptcy filing could slip, and that the deal with the Navajo Nation, the largest Native American reservation in the United States, may not come to fruition.

The sale to the tribe would occur through a court-supervised process, the source said, subject to higher and better offers and approval from a judge.

The Wall Street Journal first reported the company's plan to file for bankruptcy and sell to the Navajo Nation.

Remington and a representative for the Navajo Nation did not immediately respond to requests for comment.

The Navajo Nation made a bid in 2018 for Remington, planning to use an investment trust to fund a purchase that would transform the company by dropping assault-style weapons and focusing instead on hunting firearms for consumers, sales to law enforcement and smart gun technology, the New York Times has reported.