The Sears (SHLDQ  ) saga continues as Chairman Edward Lampert's hedge fund ESL investments revamped its offer to buy the retailer, bringing up the amount to $5 billion. Though the auction will be held on Monday, January 14, 2019, results may not be revealed in Bankruptcy Court until Wednesday. From that point, other retailers will have an opportunity to challenge the outcome. Whatever the eventual result, all matters will need to be approved by a bankruptcy judge.

If ESL investments manages to out-bid other interested parties, it will protect the 50,000 Sears employees and provide a reprieve from the complete liquidation process to keep the business running. Lampert offered the revised bid last Wednesday after his original offer came under fire from investors concerned that it wouldn't cover all the company's debts.

"This is a large company...that affects a lot of people," US Bankruptcy Judge Robert Drain said during a hearing last Tuesday. He said Lampert's revised bid was a "good development" that may allow Sears to "survive as a going concern, at least in part." Let it be noted however that if Lampert's offer isn't approved at auction, he'll lose more than $17 million to Sears creditors from his own deposit.

Another potential roadblock is Lampert's proposal to forgive a $1.3 billion of debt that ESL Investments currently holds from Sears in exchange for control of the company after auction. This "credit bid" has come under attack from creditors as being illegitimate and unconventional.

ESL was also accused of engaging in deals that generated conflicts of interest, shedding further doubt on Lampert's credit legitimacy. To combat criticism, ESL issued a statement referring to previous transactions that were validated and fair, and showed "the firm's consistent support for Sears in its efforts to return to profitability amid disruption in the retail industry."

"Any allegation that ESL received 'sweetheart' deals is plainly wrongheaded and intended to inflame opinion against ESL," the hedge fund stated in court.

However, given how deep-rooted Sears' problems are, there's no guarantee that Lampert winning the bid will necessarily revive the company over the long-term. In fact, it may still be "an unjustified and foolhardy gamble with other people's money."

Alternatively, even if Sears is liquidated, there are parts of it that ESL could buy individually and retain. Some potential subsets that can be retained include the Sears Home Services business or brands like Kenmore and DieHard.