The end: Sears reportedly liquidating

The end: Sears reportedly liquidating

Sears will then hold an auction January 14, when it will compare Lampert's offer against others by liquidators.

The Seritage deal as well as the sale of Lands' End are being investigated by the creditors' committee and are the subject of potential litigation against ESL and Lampert, who offered to pay $35 million to be absolved of allegations that ESL paid favorable prices to obtain the assets.

The 126-year-old retailer on Tuesday was set to ask a bankruptcy court's permission to proceed with a planned liquidation after rejecting a $4.4 billion takeover bid from majority investor and Chairman Eddie Lampert, according to multiple media reports.

Sears Holdings Corp agreed on Tuesday to consider a revised takeover bid from Chairman Edward Lampert, temporarily staving off a liquidation that would have spelled the end of the 126-year-old US department store operator.

Lampert touted his merger of Kmart and Sears as laying the groundwork for their revival, a scenario that did not work out, and had the hedge fund manager relinquishing his role as CEO just after Sears filed for bankruptcy protection last fall.

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Sears has not said how many other offers it received or whether any others would let the retailer avoid liquidation.

Ultimately, a bankruptcy judge is giving Lampert more time. Drain said other parties could submit new or improved bids, and Sears' financial advisers would let them know if they would be considered at the auction.

He also offered to forgive more than $1 billion in debt he is owed by Sears from earlier loans he made to the company. The creditors' attorneys question whether the terms of those loans unduly benefited Lampert and his hedge fund rather than Sears. Merchandise from toys, medicine, gramophones, automobiles, kit houses and tombstones made it the Amazon of its time.

Even though no other bidders stepped forward, Sears Holdings' board decided the offer wasn't good enough since almost a quarter of it was in the form of debt forgiveness.

But critics say Lampert let the stores deteriorate over the years, even as he bought the company's stock and lent it money.

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