PORTLAND (AP) – A judge’s self-imposed 4 p.m. deadline for deciding the fate of the bankrupt Eastern Pulp and Paper Corp. came and went Wednesday, leaving the future of its Lincoln and Brewer mills up in the air.

But U.S. Bankruptcy Chief Judge James Haines indicated he was prepared to work into the night before determining whether to accept an $8.5 million offer for the company or move to have the properties abandoned.

The chief objection to the purchase offer by two Massachusetts investors came from one of Eastern Pulp’s major creditors, Corsair Special Situations Fund, which argued that its interests were being getting short shrift.

Corsair attorney Bruce Sleeper was concerned that his client would be getting about $800,000 less than the $3.3 million it claimed it was owed. He also objected to bidding procedures and raised questions about the potential buyer’s financial capacity.

But the judge suggested that disgruntled creditors were kidding themselves if they believed that scuttling the proposed sale would allow them to have access to the mills and sell off machinery and equipment to get a bigger payback.

Assistant Attorney General Dennis Harnish, representing the state Department of Environmental Protection, made it plain that the state lacked the funds to avert the environmental disaster that would take place if the mills were abandoned.

To protect public health and safety, Harnish said the state was prepared to file for liens on the real estate and equipment at the mills.

The only offer for the mills came from Satish Agrawal and Robb Osinski, whose stalking horse bid would set the stage for a court auction in which other potential buyers would have the opportunity to come in with a higher offer.

At stake in the lengthy court proceedings are a total of 750 jobs at a tissue making operation in Lincoln and a coated paper line in Brewer.

Agrawal, a former executive at Polaroid, has indicated that he hopes to introduce a line of digital papers at the company.

Eastern Pulp, with headquarters in Amherst, Mass., filed for Chapter 11 reorganization in September 2000 because of financial problems linked to weak conditions in the paper market.

As the market continued to slump, the judge converted the proceeding to Chapter 7, or liquidation bankruptcy, three weeks ago after Eastern was unable to secure a loan to continue operations.

AP-ES-02-25-04 1803EST