A last-minute bid to save Sears now faces new challenges.

The U.S. government, major mall owners and other creditors are lining up to block the effort to hold off liquidation, setting up a courtroom clash to decide the fate of one of America's most iconic retailers.

The federal agency that backstops corporate pensions is objecting to Sears chairman, investor and former CEO Eddie Lampert's bid to acquire the retailer out of bankruptcy, a deal that presents the last remaining alternative to going out of business altogether. The agency accused Lampert of structuring the deal to inappropriately obtain ownership of the chain's Kenmore appliance brand and the DieHard tools brand.

The government's allies include certain powerful mall owners, such as Simon Property Group, which have banded together and accused Lampert of orchestrating a "scheme" to "steal" the company and capitalize on its decline.

That the bankruptcy is coming down to a dramatic clash between Lampert and Sears on one side and the U.S. government and creditors on the other side is fittingly dramatic for a company whose slow-motion collapse has been mourned, mocked and foretold by many observers for the past several years.

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Both sides will get their chance to persuade Judge Robert Drain during a hearing Monday in New York regarding the acceptability of Lampert's offer through his hedge fund ESL Investments.

After the hearing, which may extend to Wednesday, Drain is expected to rule on whether Sears can sell itself or not. Absent a deal, liquidation is almost inevitable.

The latest obstacle to Lampert's effort to keep a shrunken portion of Sears alive comes in the form of the Pension Benefit Guaranty Corporation. The U.S. agency accused Lampert's fund of structuring the buyout to "intentionally undermine" the promises Sears made in recent years to help the government guarantee the retirement income of about 90,000 retirees.

It marks the latest in a series of allegations by creditors and critics that Lampert has capitalized on the decline of Sears. USA TODAY reported in June that Lampert was receiving up to $220 million annually in loan payments from the retailer and had structured loans to ensure his hedge fund got access to key assets in the event of bankruptcy.

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As the largest unsecured creditor in the Chapter 11 bankruptcy, the PBGC's decision to oppose the deal increases the likelihood that Drain will reject Lampert's offer to keep about 400 stores open and 45,000 employees in their jobs.

Sears and Lampert's ESL declined to comment for this story. But the hedge fund said last week that it "vigorously disputes" the creditors' accusations, calling them "misleading or just flat wrong."

ESL said it "has been a constant source of financing for Sears" and that "all transactions were done in good faith, on fair terms, beneficial to all Sears stakeholders and approved" by a board with a majority of members who were independent of Lampert.

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Despite the demise of Sears – which has closed more than 3,500 stores and cut about 250,000 jobs over the last approximately 15 years – the retailer's pensions don't need to fret about their income.

Sears retirees are expected to receive their benefits in full, in part because the PBGC took action years ago to effectively force the retailer to pledge key assets to reduce its pension shortfall.

Ron Olbrysh, chairman of the National Association of Retired Sears Employees, said retirees could lose a small amount of Sears-paid life insurance if the company liquidates. But he said retirees don't need to be worried about pension cuts despite the PBGC's concern about Lampert's offer.

"Retirees will continue to receive benefits without interruption," he said.

The PBGC confirmed that assessment. But the agency could be forced to pick up more of Sears' $1.4 billion pension shortfall if Lampert is allowed to acquire the company's prized Kenmore and DieHard brands, which the retailer had pledged in a previous arrangement as a way of shoring up its retirement benefits.

Lampert is "intent on owning the Kenmore and DieHard trademarks and using the bankruptcy process to obtain them," the PBGC alleged in a court filing.

Meanwhile, the committee of unsecured creditors that includes Simon Property Group has accused Lampert of structuring various transactions and past loans over the last several years to "steal the remaining assets" of the company.

ESL has defended the deals as appropriate and said it deserves credit for keeping Sears alive and employees on the job.

Critics say that was never Lampert's goal.

"He doesn't care about the business," said Toms River, New Jersey, resident Bruce Miller, 56, who worked at Sears Auto for more than 35 years before getting laid off in June. "Everything he’s done is to protect himself. No matter what happens, he’s going to make money either way."

Lampert's offer to keep a smaller version of the company operating could still appeal to the judge. ESL has valued its bid at more than $5 billion, including the assumption of liabilities.

The hedge fund's willingness to step in when there's no one else left to keep Sears alive could win the day.

"There can implicitly be a lot of pressure on a court to approve the deal that will keep a company alive," said University of North Carolina Chapel Hill bankruptcy professor Melissa Jacoby, in an email. "Whether that is the deal that is in the best interest of all stakeholders can be a very different story."

Jacoby said the accusations by the unsecured creditors in the Sears bankruptcy show it's "very important that prior transactions get investigated."

"To the extent that the Lampert deal tries to prevent that investigation, that is a big concern," she said.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey

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This article originally appeared on USA TODAY: Is Eddie Lampert set to 'steal' Kenmore brand? Courtroom clash will decide fate of Sears