The end: Sears reportedly liquidating

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As many as 50,000 jobs are at stake.

Ultimately, a bankruptcy judge is giving Lampert more time. Sears will then hold an auction January 14, when it will compare Lampert's offer against others by liquidators.

The reprieve came after what Sears lawyers described to a bankruptcy judge in NY as "round-the-clock" negotiations following the company board's initial rejection of Eddie Lampert's proposal, which sought to preserve 425 stores and 50,000 workers.

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"ESL is the largest creditor of Sears, and their offer includes a credit bid of $1.8 billion of the debt they hold - that's something that might be problematic going forward", Sarah Foss, a legal analyst at Debtwire told CBS MoneyWatch in December.

In addition, Lampert wanted a release from legal exposure related to a series of transactions he completed with the retailer before it filed for bankruptcy protection.

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.

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But the deal announced Tuesday afternoon at least gives the company a chance of surviving, which appeared to be slipping way heading into the hearing. That raised concerns in the negotiations since the maneuver might not be allowed in court, the sources said, given ongoing investigations of Lampert's pre-bankruptcy deals, which the hedge fund manager maintains were proper. Merchandise from toys, medicine, gramophones, automobiles, kit houses and tombstones made it the Amazon of its time.

Sears was down almost 94% in the past year. Even as Sears' brick and mortar competitors established effective e-commerce operations Sears - a pioneer in catalog sales - failed to do so.

As late as Monday night, the company had told involved parties it was planning to announce a liquidation before the market opened on Tuesday in NY, according to a person with knowledge of the matter.

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