Should Sears liquidate its assets, it would become one of the most high-profile victim in the wave of bankruptcies that has swept the retail sector in the last few years, as the popularity of online shopping exacerbates the fierce price competition facing brick-and-mortar stores.

Sears, which filed for bankruptcy protection last October, may have to close hundreds of stores it is still operating, potentially putting up to 68,000 people out of work, the sources said. Its vast inventories of tools, appliances and store fixtures will be sold in fire sales, the sources added.

Lawyers for Lampert and his hedge fund, ESL Investments Inc, also plan to present details of his offer and make the case for renewing efforts to save Sears in bankruptcy court on Tuesday, the sources said.

U.S. Bankruptcy Judge Robert Drain in the Southern District of New York, who is presiding over the case, could decide to give Lampert more time to improve on his bid, the sources said. A bankruptcy auction for Sears’ assets is not due until Jan. 14.

The sources asked not to be identified because the matter is confidential. Representatives for Sears and Lampert offered no immediate comment.

Sears will now plan for a separate February auction of its assets and real estate, some of the sources said. Lampert, who also made a back-up offer for some of the assets as part of his initial $4.4 billion proposal, will make another bid, the sources added.

A main point of contention in the negotiations between Lampert and Sears centered on whether Lampert’s bid fully addressed the bankruptcy costs that Sears has racked up, some of the sources said.

The costs, which include bills from lawyers and financial advisers, are expected to exceed $200 million, those sources said.

Lampert’s bid proposed forgiving $1.3 billion of debt he holds in exchange for ownership of the reconstituted Sears, a bankruptcy maneuver known as a credit bid.

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. Those made him the company’s biggest creditor, in addition to its largest shareholder. Read more at Reuters