Sears Holdings Corp. is getting ready to file for bankruptcy as soon as this week, having hired investment and advisory firm M-III Partners LLC to work on the proceedings, The Wall Street Journal reported Oct. 9, citing sources familiar with the situation.

The sources told the newspaper that staff of the New York-based advisory firm went to the department store chain's headquarters in Hoffman Estates, Ill., to prepare a potential bankruptcy filing as Sears faces an Oct. 15 deadline for a $134 million debt payment.

The news comes about two weeks after it was disclosed in an SEC filing that Chairman and CEO Edward Lampert, through his hedge fund ESL Investments Inc., had proposed a restructuring plan for Sears in a bid to avoid bankruptcy protection. It called for cutting the company's debt by 78% to $1.24 billion, liquidating $1.75 billion in assets and seeking sales of $1.47 billion in real estate holdings.

One source told the Journal that Lampert would prefer to restructure the company's debt without filing for bankruptcy, which he considers risky for retailers. However, Sears' struggles with profitability have been an obstacle in getting lender support for the restructuring plan, another source said.

The ailing retailer is continuing to close unprofitable stores in an effort to stay afloat financially, with Sears saying it was aiming to "rightsize our store footprint" after reporting a fiscal second-quarter loss of $508 million.

Lampert also sought advice from restructuring firm AlixPartners LLP, lawyers at Weil Gotshal & Manges LLP and investment bank Lazard Ltd., according to the report. In addition, Sears appointed Alan Carr as a new director earlier on Oct. 9. The Journal said Carr is an expert on restructuring.