A committee of other creditors, including vendors and landlords, has proposed that Sears instead move forward with plans to shut down the business, closing all the stores and liquidating its inventory and other assets.
Lampert's hedge fund, ESL Investments, had previously stated earlier this month it was willing to buy Sears in full with a $4.6 billion proposal.
When the Hoffman Estates, Illinois-based company filed for Chapter 11 bankruptcy protection in October, it had 687 stores and 68,000 workers.
To save the company, they will be closing 80 stores, including the Kmart in Grand Forks. The closings affect two Sears stores in IL; a store in Fairview Heights, near St. Louis, and one in Cherry Valley, near Rockford, are among those to be closed. Earlier this month, he said he meant to offer $4.6 billion for the stores and assets. The plan includes keeping 425 stores open and a $1.3 billion financing commitment, the statement said.
The latest nail in the coffin for Sears stores came Friday in an announcement that an additional 80 stores will close - including the WestShore Plaza location. That's in addition to the 182 stores already slated for closure, including 142 by the end of 2018 and 40 by February.
Two Central Texas Sears will be closing by Spring. Liquidation sales are expected to begin in two weeks. Most of the 80 stores will shut down by late March.
At the time of the bankruptcy filing, Lampert said his plan could have preserved 50,000 jobs.
Sears Holdings Corp., which also runs Kmart, joins the list of retail brands taken over by hedge funds that collapsed under the weight of debt forced upon them.
Lampert bought Sears and merged it with Kmart in 2005 to form Sears Holdings.
Sears' advisers have until January 4 to decide whether ESL is a "qualified bidder" to take part in the January 14 auction against liquidation bids.