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He said previously the situation did not have the "sense of urgency" that exists now.

Sears, which has been losing money for years, has $134 million in debt due on Monday.

However, Lampert wants to restructure the debt without filing for bankruptcy protection, because he views bankruptcy as risky for retailers, the Journal said.

Investors are giving up hope on a deal. Lampert and ESL are the company's two largest shareholders.

A potential Sears Holdings (ticker: SHLD) bankruptcy could be a blessing for some real estate investment trusts, argues Wells Fargo . For example, he recently offered to buy its Kenmore appliance brand for $400 million. He says he thinks Sears could be looking at a big liquidity infusion or restructuring debt.

Sears shares were down 31 per cent at 40.5 cents in afternoon trading in NY, giving the company a market capitalization of $40 million. The sale represents just 8% of his remaining stake in the company, but it's not a good sign: He may be cutting some of his losses, because shareholders are typically wiped out in a bankruptcy.

On Tuesday, Sears announced that it had hired restructuring expert Alan Carr as an independent director. But if Sears is now in touch with banks to secure the financing needed for a bankruptcy filing, as CNBC reported Wednesday morning, that could send the surest signal yet that such a move may not be far off.

Still far off, Michael a growing menace to Florida Panhandle
But within hours Sunday it had gained more punch and its top sustained winds clocked in at 60 mph (95 kph) by late Sunday evening. Central Florida is expected to see up to 4 inches of rain in the coming days as Michael's outer bands whip the region.

Sears had no comment on the report.

But the retail landscape is littered with out-of-business brands that tried to reorganize in the bankruptcy process and liquidated their businesses instead.

But many flailing retailers have tried that tactic before and failed (see: Toys "R" Us).

It warned in September for a second time that it could go out of business, hurt by falling foot traffic at its brick-and-mortar stores as customers shift online.

He writes that Sears occupies a significant amount of space, but that about three-quarters of its stores are outside the U.S.'s Top 50 markets, so while many landlords rent space to the retailer, that exposure is relatively small. A long series of store closings has left it with fewer than 900 today. The retailer closed its last Sears store in Chicago in July and has announced plans to close another 46 stores by November, including a Kmart in Steger and a Sears in Bloomington.

The company has taken a number of steps in recent days to prepare for a filing.

Sears and Kmart had 89,000 employees as of February 3 of this year, according to a company filing.