BMX biking has polished its image since the sport's early days
Huffy, a 115-year-old US bicycle maker and one of the country's best-known brands, looks set to fall into Chinese hands.
Huffy is to reorganise, allowing its Chinese suppliers and a firm linked to the Chinese government to raise their shareholding to 51% over five years.
Famous for its BMX stunt bikes, Huffy ran into problems after it bought Canada's Gen-X in 2002 and is currently under bankruptcy protection.
The agreement "will result in Huffy
emerging from bankruptcy later this year", chief executive John Muskovich said.
The deal comes at a time when an increasing number of US firms have become takeover targets for Chinese buyers.
Huffy will issue new shares to pay off its debts, and will then give them to suppliers and the China Export & Credit Insurance Corporation.
The two creditors, known as the Sinosure Group, will also get debt notes worth a total of $12m (£6.6m).
Huffy wants to turn profits around
As part of the rescue plan, Huffy will become a private company and hand over its pension liabilities to the US agency, the Pension Benefit Guaranty Corp.
The firm's problems began when it bought Gen-X, which makes bikes and basketball backboards as well as in-line skates, golf clubs and snowboards.
Competition in the industry is fierce, however, and Huffy has found the pricing environment harsh, analysts said.
More and more US firms have become targets for Chinese companies.
Politicians have written to President George W Bush in an effort to block an $18.5bn buyout of US oil company Unocal by China's CNOOC oil group.
And last year, Lenovo bought IBM's personal computer business for $1.7bn.