A group of Sears Holdings Corp. lenders is pressing the department store operator to liquidate as the embattled company barrels toward bankruptcy, The Wall Street Journal reported Oct. 11, citing people familiar with the matter.

The lenders, which include Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., met with Sears on Oct. 10 to discuss emergency financing for Sears. The meeting ended in a stalemate, with the lenders pushing for Sears to liquidate under a Chapter 7 bankruptcy filing, while the department store operator wants to reorganize under Chapter 11, according to the report.

Sears did not immediately respond to S&P Global Market Intelligence's request for comment.

The lender group is only willing to provide enough debtor-in-possession financing for Sears to sell assets and close stores, some of the sources told the Journal. Sears is expected to file for bankruptcy Oct. 15 and will need to make a $134 million repayment on its debt at the time, the sources said.

Edward Lampert, CEO and chairman of Sears, has repeatedly bailed out Sears with a series of short-term loans from his hedge fund ESL Investments. But Lampert does not plan to extend another loan to help the beleaguered department store operator to make the Oct. 15 $134 million payment, according to the report.

Lampert proposed an out-of-court restructuring in September that would have reduced Sears' $5.5. billion debt by over $1 billion, divest $1.5 billion in real estate assets and sell another $1.75 billion in assets, including the Kenmore appliance brand. Lampert also would have bought the Kenmore brand for $400 million.

The Sears board shot down the Kenmore deal after it became apparent the week of Oct. 8 that Lampert's broader restructuring plan was not winning support from creditors, the report said, citing a person familiar with the matter.