Bid from former CEO ensures Sears survives bankruptcy auction. For now.

Sears Chairman Edward Lampert appears to have pulled off his bid to rescue the bankrupt retailer from liquidation, as reported in the Chicago Tribune

It’s good news for employees at the stores that could remain in business and for still-loyal shoppers. But it remains to be seen whether the retailer’s latest lifeline from its former CEO buys the time needed to finally pull off a turnaround.

Lampert, who stepped down as CEO when the company filed for bankruptcy protection in October, has been trying to right the ship at Sears for years. Meanwhile, competition from rivals like Amazon, Walmart and Target isn’t getting any easier for old-school department stores. Even at stronger chains like Macy’s, consumers didn’t spend as freely as expected during an otherwise strong holiday season.

Neither Sears Holdings Corp. nor Lampert’s hedge fund, ESL Investments, shared details of the final bid the hedge fund submitted in a bankruptcy auction this week. Bloomberg News reported the final offer is valued at more than $5 billion and represents a more than $150 million improvement over ESL’s previous offer. It also doesn’t release Lampert from liability related to transactions between his hedge fund and the retailer prior to Sears’ bankruptcy filing, according to Bloomberg, something Lampert sought in earlier bids. The deal still requires approval from the U.S. Bankruptcy Court for the Southern District of New York.

A committee representing Sears’ creditors has questioned financial dealings between Lampert, ESL and Sears, saying those transactions “may be part of an extended pattern of conduct that served to benefit certain (insider) equity holders,” according to court filings, claims ESL has denied.

An early version of ESL’s offer included about 425 stores and many of Sears’ remaining assets. ESL said it could preserve up to 50,000 jobs. But Lampert and ESL haven’t elaborated on their strategy, and some analysts said the plan to reorganize around a smaller group of successful stores sounded a lot like the playbook Lampert relied on before the company’s bankruptcy, as the company amassed more than $11 million in losses since 2011.

Lampert engineered Kmart’s $11 billion acquisition of Sears in 2005 and, through his hedge fund, is the company’s largest shareholder. He has said he’s provided Sears with more than $2.4 billion in loans and other forms of financing over the last several years.

According to the article, the company has made efforts to adapt to changes in customers’ shopping habits, including selling Kenmore appliances through Amazon, offering curbside pickup for online orders and opening smaller stores, including its remodeled and downsized Oakbrook Center store, which reopened shortly before Sears’ bankruptcy filing.

Read on for our story on how Ace Hardware and Centerbridge were eyeing the lucrative Sears Home Services Unit.