Sears Holdings is getting things in order for a bankruptcy filing that could come sometime this week.
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The retailer has reportedly hired M-III Partners to make the preparations for the filing, people familiar with the situation tell Dow Jones Newswires.
A debt payment deadline may be the final straw.
Sears has $134 million in debt due on Monday.
In recent days, M-III staff have been at the retailer's headquarters in Hoffman Estates, Illinois, one person said.
Sears continues to discuss other options and could still avert an in-court restructuring, the people added.
Edward Lampert, the hedge-fund manager who is Sears's chairman, chief executive, largest shareholder and biggest creditor, could rescue the company, as he has done in the past by making the payment.
Sears has more than $11 billion in cumulative losses since 2011, and its annual sales have dropped nearly 60 percent in that period to $16.7 billion, according to Dow Jones.
On Tuesday, Sears added restructuring expert Alan Carr as a director, expanding the six-person board to seven. Mr. Carr runs a restructuring advisory firm and previously worked as a restructuring lawyer at Skadden, Arps, Slate, Meagher & Flom LLP.
Shares of Sears, which traded as high as $144 over a decade ago, closed Tuesday at 59 cents, a sign that investors are bracing for a potential bankruptcy filing or restructuring.