By Chris Isidore, CNN Business

(CNN) -- Time is running out for Sears. The bankrupt retailer could be forced to start the process of shutting down as soon as Tuesday if it doesn't accept the only bid to save it.

Parent company Sears Holdings, which filed for bankruptcy in October, had a deadline of this past Friday to accept a $4.4 billion bid from the hedge fund run by its chairman and former CEO, Eddie Lampert. The bid called for keeping 425 stores open and offering jobs to 50,000 of its remaining employees.

But the deadline passed without any word from Sears on the status of the bid. Lampert's hedge fund also declined to comment.

A hearing is scheduled for Tuesday in bankruptcy court. The hearing was added to the schedule late Friday.

If Sears doesn't accept Lampert's bid as a valid offer, it likely will have to ask the court for permission to start shutting down the business.

Bloomberg reported that Sears representatives summoned liquidation firms and other advisers to emergency meetings on Friday because it decided it couldn't accept Lampert's offer.

The creditors committee, a group that speaks for many of the companies and people owed money by Sears, had already been urging the court to start the process of shutting down Sears. The creditors committee does not represent Lampert.

In bankruptcy court filings it called Sears previous plans to stay in business "nothing more than wishful thinking " and "an unjustified and foolhardy gamble with other people's money."

A key problem with Lampert's bid is that it included very little cash.

He offered to forgive some of the money he loaned to Sears over the years, and said he had arranged for $1.3 billion in new loans from three leading financial institutions.

The creditors committee argues that his debt should not be recognized by the court, because Lampert loaned Sears the money when he was CEO. The creditors' attorneys question whether the terms of those loans unduly benefited Lampert and his hedge fund rather than Sears. They planned to challenge the loans in bankruptcy court.

Lampert and his hedge fund argue the loans were proper and made to keep Sears alive. He also has argued that keeping the company in business was in the best interest of both employees, creditors and the communities served by Sears and Kmart stores.

When Sears filed for bankruptcy in October, it said it hoped to stay in business, using the bankruptcy process to shed debt and other costs to become a smaller, more competitive retailer. Sears' last profitable year was 2010 and it has lost $12 billion since then.

It had nearly 700 stores and 68,000 employees at the time of the October bankruptcy filing, but it has been shutting down money-losing stores since then.

Retailers typically file for bankruptcy with the intention of staying in business, as Sears did. But many end up going bust after filing. In recent years, Toys "R" Us, RadioShack and Sports Authority have followed that path to the graveyard.