Sears Holdings Corp (NASDAQ:SHLD) denied media reports that it is considering selling its Canadian business. Yesterday, The New York Post reported that Sears’ CEO Eddie Lampert is planning to sell the company’s Canadian arm. The billionaire hedge fund manager has been selling some of the company’s best stores in Canada since he took over at Sears Holdings Corp (NASDAQ:SHLD) in 2005. Recently, the company announced it would sell five major stores in Canada, including the coveted Toronto Eaton Center store, for $400 million.

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Sources told The New York Post yesterday that Eddie Lampert is discussing the sale process with several banks including Goldman Sachs Group Inc (NYSE:GS). They added that Lampert has already been shopping Sears Canada to potential buyers, but with no success. What’s surprising is that Eddie Lampert never hires a bank to handle a sale process.

Sears Canada continues to lose money. For the latest quarter, it posted a loss of $46.3 million. However, the unit announced a dividend of $483 million. A large part of that will come from the sale of five flagship stores in October. Its sales declined to $4.3 billion last year from $6.5 billion in 2002.

Sears to file for bankruptcy?

Mark Cohen, a former CEO of Sears Canada and currently a professor at Columbia Business School, says the consistent sell-off of high performing stores is just a template of what’s about to come. Cohen says, unlike a legitimate businessman, Eddie Lampert is simply selling assets and putting the cash in his pockets. Sears Holdings Corp (NASDAQ:SHLD) owns 51% stake in Sears Canada. Eddie Lampert’s ESL Investments owns 27.6%, and Lampert directly owns a 10.2% stake in Sears Canada. That makes the hedge fund manager one of the biggest beneficiaries of Sears Canada’s asset sales.

An industry source told the NYPost that Sears Holdings Corp (NASDAQ:SHLD) is going to sell all its stores and distribute the money to shareholders. And after some time, they would file for bankruptcy.

Sears Holdings Corp (NASDAQ:SHLD) shares were up 5.79% to $64.89 at 2:12 PM EST.