Before bankruptcy seemed inevitable, Lampert's hedge fund ESL had been pushing a debt-restructuring proposal that would avoid a bankruptcy filing.
The 125-year-old company has been struggling for several years and is drowning in debt. The company had a $134-million (about Rs 992 crore) payment due on Monday.
Struggling retailer Sears, which has a store at the Natick Mall, has filed for bankruptcy.
The chain, which comprised 863 mall-based stores and an additional 1,200 retail locations in the year 2000, had 866 Sears and Kmart stores as of August 4 and expected to close 149 of them in the second half, according to a September 13 filing.
Mr Lampert, the largest shareholder, had pledged to restore Sears to its glory days by loaning out his own money to prop up the company. That's in addition to the 46 store closings already planned for next month.
Shareholders generally lose all or most of their investment when a company files for bankruptcy, and the ability of Sears to escape liquidation will depend on the willingness of creditors and suppliers to keep the company afloat. A release from the company also says the current Chief Executive Officer will step down, effective immediately. Lampert personally owns 31 percent of the companys shares.
"The Chapter 11 process will give Holdings the flexibility to strengthen its balance sheet, enabling the Company to accelerate its strategic transformation, continue right sizing its operating model, and return to profitability", Chairman Eddie Lampert said in a statement.
The retailer, for years called Sears, Roebuck & Co. and famous for its massive catalog, boomed in the decades after World War II along with a growing middle class.
Google Map shows couple road to divorce
While moving the camera around at street level, he saw a woman sitting on a bench with a man's head on her lap. The man went on to confront his wife about her infidelity following the discovery of the picture from 2013.
Fallout 76 Mod Support Might Not Come Before November 2019
The Fallout 76 Stress Test requires an Xbox Live Gold membership and it will only be available in North America in English only. The game runs a little rough which is surprising given the Xbox One X is the most powerful console now on the market.
PlayStation 4 consoles are crashing because of a malicious message
Some PS4 owners are experiencing a frightening glitch that's forcing them to factory reset their consoles. Some cases are so severe that a factory reset becomes necessary to stabilise the console once again.
That's in contrast with chains like Walmart, Target, Best Buy and Macy's, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily in remodeling and de-cluttering their stores.
The critical holiday season will be a particular challenge for Sears.
But they will need to do better than previous year.
"The problem in Sears case is that it is a poor retailer", he wrote. Its management tried to compete by closing stores and cutting costs. Now, all that remains is a rundown Sears outlet warehouse store scattered along the railroad tracks in an industrial neighborhood alongside the Allegheny River in Lawrenceville.
Sales declined. Losses piled up in the billions of dollars.
Sears' stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index.
Over the summer, a special board committee Sears created was resisting a rescue offer from Lampert to acquire assets from it, including its Kenmore appliance name.
Judge Robert Drain will oversee the bankruptcy, with Sears represented by the law firm Weil Gotshal & Manges, according to court documents.