Holley Performance Products, a maker of high-performance carburetors and automotive fuel-injection systems, filed for bankruptcy on Monday, its second filing in less than two years.

The privately held company, which is a major supporter of drag racing and NASCAR racing, said in court documents that sales have fallen as much as 40 percent since it emerged from bankruptcy last year.

In addition, the company's business supplying emission control components to vehicle makers suffered as a major customer, Caterpillar Inc, discontinued a line of truck engines.

Thomas Tomlinson, the company's co-chief executive and chief financial officer, said in court documents that Holley has been negotiating with holders of the company's first-lien secured debt to restructure its finances.

The company rejected a forbearance proposal by debt-holders including Wells Fargo Foothills Inc, as the administrative agent, and Regiment Capital Special Situations Fund IV LP, which Tomlinson said would have taken $2.5 million out of the business.

Tomlinson said the debt-holders told the company they would consider foreclosing on the company's assets if an agreement could not be reached last week, which prompted Holley to seek Chapter 11 protection from creditors.

The company was founded more than 100 years ago and its brands include Flowtech, Weiand, Nitrous Oxide Systems and Hooker.

Holley filed for bankruptcy in early 2008 and transferred its equity to holders of $95 million in second-lien debt.

The case is In re Holley Performance Products Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-13334. (Editing by Maureen Bavdek)