A federal bankruptcy judge has approved the sale of Indiana's oldest ethanol plant three months after its owner filed for bankruptcy protection.

A joint venture bought the New Energy Corp. plant at auction last week for $2.5 million and a bankruptcy judge in South Bend approved the sale Tuesday.

New Energy President Russ Abarr said he had hoped the auction price would cover the company's $54 million in debt. A large portion of that debt is owed to the U.S. Department of Energy, which guaranteed the original loans for the plant.

"It was very disappointing," Abarr told the South Bend Tribune.

A bid of $3 million was submitted, but an official who helped manage the auction said it wasn't considered acceptable.

The sale to Detroit-area Maynards Industries and Los Angeles-based Biditup Auctions Worldwide could spell the end of the plant's nearly 30-year run on South Bend's southwest side.

The plant cost more than $180 million to build. It opened in 1984 and could produce 100 million gallons of ethanol a year, but was closed in November.

Abarr said he had also hoped the plant would eventually reopen. Attorneys for Maynards and New Energy said the companies planned to look into finding a new operator for the plant, but the Tribune reported the plant components might be resold because the new owners are described on their websites as experts in auctions, liquidations and appraisals.

New Energy employed 126 people before cutting its staff to 90 in June 2011, according to bankruptcy documents. A small staff has remained on hand throughout the bankruptcy to maintain the property.

Interim City Attorney Aladean DeRose said in a motion that the loss of utility revenue from the plant, which was a major customer, would "inevitably be shifted to existing customers" and could cause a significant increase in their bills.