AGAWAM, Mass (From news reports) -- The buyer for bankrupt Southworth Co.'s former paper mill in the Turners Falls section of Montague has backed out.

Southworth Co. disclosed the collapse of the deal in federal bankruptcy papers its attorney filed Thursday.

The would-be buyer, SBD Greentech, a Maine corporation with offices in New York City, was to have paid $4 million for the former Esleeck mill. SBD told Southworth on Jan. 16 that it no longer intended to purchase the mill.

Under the terms of sale, both Agawam and the town of Montague, where the Turners Falls plant is located, will be paid first for the back taxes they are owed.

SBD Greentech's parent company, HS Manufacturing Group, didn't return messages left at its New York offices over the past few days.

The sale would have included equipment at the Turners Falls plant as well as the federal license to generate hydropower at the site.

Southworth Paper Co. bought the mill in Turners Falls in 2006. Esleeck opened the mill in 1900 and used it at first to make onionskin business paper for what was a relatively new product at the time -- the typewriter.

Southworth owes the town of Montague $275,000 in unpaid taxes and fees, according to court papers.

Southworth's mill in Turners Falls, in Franklin County, had about 50 employees at the end.

Southworth is moving ahead with plans to liquidate its other facilities.

The planned $1.9 million sale of Southworth's former plant on Main Street in Agawam is moving forward, said Corey J. Bishop, of Adams, a partner of PCT Realty, which is in the process of buying the Agawam property. Bishop spoke by phone Friday.

It's also sold equipment from the Agawam plant -- die cutters used to convert rolls of paper into usable sizes -- to Mohawk Fine Papers, of Cohoes, New York, for $150,000. Mohawk has an envelope factory in South Hadley.

Southworth also has received permission from the bankruptcy court to auction off the furnishings and equipment at its Seattle greeting card and stationery business.

The company dates to 1839.

Southworth is liquidating its assets through a federal bankruptcy process. It filed for bankruptcy protection in September, about a month after shutting down abruptly and throwing 120 employees out of work.

Southworth listed $17.84 million in debt in its bankruptcy filing. That figure included $9 million in underfunded pension liability.

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