UPDATE 1-Northeast Biofuels files for bankruptcy

NEW YORK Jan 15 (Reuters) - Northeast Biofuels has filed for Chapter 11 bankruptcy after design flaws and construction delays at its facility rendered the ethanol maker unable to make debt payments.

As of Nov. 30, the company had $167 million in assets and $174 million in liabilities, according to documents filed in U.S. Bankruptcy Court in New York on Wednesday.

VeraSun, one of the largest U.S. ethanol makers, filed for bankruptcy last October due to liquidity constraints.

Northeast Biofuels said that until its facility is complete and operational, it cannot generate meaningful revenue.

The plant in Fulton, New York, which employs about 60 people, is designed to produce more than 100 million gallons of ethanol per year when operating at full capacity.

Northeast Biofuels said it is in negotiations to resolve a dispute with Lurgi, the contractor hired to build the facility. (Reporting by Euan Rocha; editing by John Wallace)