* Sears Canada CEO to step down, cites personal reasons

* Sears shares down 23 pct since last Monday

* Fairholme says not participating in Lampert loan (New throughout, adds filing from shareholder Fairholme)

By Solarina Ho and Nathan Layne

TORONTO/CHICAGO, Sept 25 (Reuters) - The turnaround specialist who had signed on to run Sears Holdings Corp's Canadian business is resigning for personal reasons, the struggling U.S. retailer said on Thursday, the same day a major shareholder said it was no longer interested in contributing to a loan.

Chief Executive Officer Douglas Campbell will resign by the end of 2014 to tend to family matters, said Sears Canada, which is majority owned by Sears Holdings. Campbell had taken the helm of the unit just a year earlier.

Separately, the No. 2 shareholder in Sears Holdings, Fairholme Capital Management, said it decided not to participate in a $400 million loan extended by a hedge fund of Sears CEO Eddie Lampert to get the U.S. retailer through the crucial year-end shopping season.

Sears Holdings shares slid 2.8 percent on Thursday. They are down 23 percent since last Monday, when the loan deal was announced.

Last week, after Sears announced the loan, Fairholme said it was considering taking part in the financing. On Thursday, it said it declined "in light of its investment criteria".

Sears, which had never disclosed that it had sought Fairholme's involvement, said it was still on track to receive the full amount from Lampert's fund, ESL Investments.

"ESL made a $400 million loan to Sears. That is intact. Nothing has changed," ESL spokesman Steven Lipin said.

Some analysts have questioned the terms of the loan arrangement, which would give Lampert's fund claim to 25 properties in the event of a default. The properties were not identified, prompting speculation the deal could hand him the best of the company's portfolio of more than 2,000 stores.

Sears has said the terms were fair and in line with other loans in the retail industry.

The loan was also seen as a sign that Sears was having trouble generating cash from other planned asset sales, including its 51 percent stake in the Canadian business, which it put on the block this year.

Sears probably had trouble selling that stake and concluded it must restructure the Canadian business before it can "monetize it down the road", said Evan Mann, senior analyst at Gimme Credit.

Sears Canada, hit by tough competition, has seen its market share erode for years.

Campbell, a former U.S. Marine who earned a reputation as a turnaround specialist with Boston Consulting Group, had taken over Sears Canada when the previous CEO, Calvin McDonald, left. Campbell will step down by Jan. 1, 2015.