PORTLAND (AP) – A federal bankruptcy judge has approved the abandonment of Eastern Pulp and Paper’s Lincoln and Brewer mills, an attorney representing the mill’s trustee said.

“We had to do it because we were out of money,” said Fred Bopp III, the Portland attorney representing the trustee of Eastern Pulp’s bankrupt estate. “We no longer had sufficient funds to maintain warm stasis operations.”

Bopp said the mills have enough oil to heat them through the weekend. After that, someone else will have to pay for oil.

Massachusetts-based Paper Acquisition Corp. had signed a letter of intent last month to purchase the mills for $8.5 million, but a final deal could not be struck. The decision puts an apparent end to efforts to sell the mills.

“If a sale were to go forward at this point the court would need to reconsider this abandonment order,” Bopp said.

The trustees can no longer pay the 60 workers who were maintaining the mills, Bopp said. They were paid last Friday.

“It’s very unfortunate that we’re not in a position to pay them, but it was better to abandon than to have them continue to work without the prospect of payment,” Bopp said.

The mills, which employed 750 people, shut down Jan. 16 after a creditor denied Eastern Pulp a $1.5 million loan. The mills were in Chapter 11 bankruptcy protection for three years until Judge James B. Haines converted the company’s bankruptcy status to Chapter 7 in early February.

That meant the company’s assets could be sold to satisfy creditors. An auction was schedule for March 17.

U.S. Senator Olympia Snowe said the news was “extremely disappointing.”

“Clearly, the shutdown of these mills has had a devastating impact on those communities and those regions, most of all with the workers and families who looked to those mills for their livelihoods,” Snow said in a written statement.

She pledged to work with Gov. John Baldacci to re-establish those jobs and provide necessary assistance.

AP-ES-03-12-04 1738EST