June 2 (Bloomberg) -- U.S. Bankruptcy Judge Robert Gerber got off to a quick start in taking on General Motors Corp.’s $89 billion bankruptcy case, approving a plan to sell the carmaker’s best assets in the next five weeks.

A U.S. judge in New York’s Southern District since 2000, Gerber sometimes shows impatience with lawyers before him and has a record of midnight sessions to move cases along, such as that of Lyondell Chemical Co. By this morning, he’d already signed 21 orders approving GM payments to suppliers, lenders, and utilities to keep the company operating as it reorganizes.

“He will come to the bench having narrowed the issues in his own mind, asking the lawyers to focus on particular questions that he wants addressed,” said Phil Korologos, a lawyer at Boies Schiller & Flexner LLP who represented cable TV company Adelphia Communications Corp. before Gerber.

The Detroit-based carmaker plans to launch a new entity in 60 to 90 days that will be 60 percent owned by taxpayers and stocked with its best assets. The reinvented GM will sell Cadillacs, Chevrolets, Buicks and GMC trucks in the U.S., stripped of billions in debt and wage costs. Gerber will supervise the sale or liquidation of unprofitable GM brands, such as Saturn and Hummer, and at least 11 unwanted factories.

The GM case is the biggest Gerber has handled. It is the third-largest U.S. bankruptcy of any kind, trailing only those of Lehman Brothers Holding Inc. and WorldCom Inc.

The judge, 62, may rely on the precedent set in the bankruptcy of Chrysler LLC, which won court approval May 31 to sell most of its assets to its own streamlined spinoff, an enterprise to be led by Italy’s Fiat SpA.

“Thornier Issues”

Gerber “may have to grapple with some thornier issues than have arisen in the Chrysler case, but he clearly has the intellectual firepower to deal with them,” said Mark R. Jacobs, a lawyer at Pryor Cashman in New York who dealt with Gerber in the Adelphia case. “Pretty lucky draw for GM and all of the other players.” Bankruptcy judges are traditionally assigned cases randomly.

Gerber will preside as creditors challenge the government’s allocation of $82.3 billion of GM assets and $172.8 billion of debt, owed to more than 100,000 creditors. At stake are the jobs, health and retirement benefits of about 90,000 U.S. workers and their families, the economic viability of their communities and about $50 billion in loans from U.S. taxpayers.

Gerber’s supervision of the Adelphia bankruptcy, his second biggest case before GM, took almost five years, including a lengthy asset-sale. GM has said it must avoid a protracted bankruptcy so it can compete in world markets with its reinvented company.

Took Five Years

The bankruptcy of Adelphia, once the fifth-biggest cable TV company, was slowed by a criminal investigation of an accounting fraud. It filed for bankruptcy protection in 2002, listing assets of about $21 billion, and concluded its case in 2007.

Gerber approved a reorganization plan over the objections of some creditors, such as a unit of Lehman Brothers. They claimed he improperly valued some Time Warner Inc. shares Adelphia owned. On appeal, a district court judge said in January 2007 that the creditors had a “substantial possibility” of prevailing and required them to post a bond.

Responding at the time, Joe Bonner, an analyst at Argus Research in New York who had a “buy” rating on Time Warner shares, said: “It’s frustrating. It’s one delay on top of many delays.”

Even though his clients lost that appeal, Martin Bienenstock, a lawyer with New York-based Dewey & LeBoeuf LLP, said he found Gerber to be a jurist with “high energy, high intellect, and high intensity. He’ll be fair to all parties and be expeditious.”

Watches Lawyers Closely

A 1967 graduate of Rutgers University, Gerber started working at Fried Frank Harris Shriver & Jacobson LLP after earning his law degree in 1970 from Columbia Law School. A specialist in securities and bankruptcy litigation, Gerber was appointed to the federal bench in 2000, where he’s earned a reputation for keeping close tabs on lawyers.

In a recent hearing involving Crunch Fitness, the bankrupt gym operator, Gerber raised his voice at company lawyers for “obscuring” an inside sale detailed in papers requesting a loan. Gerber said the loan documents contained “one of the most outrageous provisions I’ve seen in 40 years of practicing law.” He demanded a company affidavit to explain the deal.

Such demands don’t compromise his patience, said Marshall Huebner, a lawyer at Davis Polk & Wardwell who represented lenders to both Adelphia and Lyondell before Gerber. Gerber has shown a “devotion to ensuring both fairness and the right outcome,” Heubner said. “Sometimes litigants’ behavior requires a real response,” he said.

Late-Hour Session

Gerber stayed until almost 1 a.m. during Lyondell’s first hearing to make sure all parties had their say and that the company could get the relief it needed from the bankruptcy court, Huebner said.

In the Lyondell case, funded with an $8 billion bankruptcy loan -- the record before GM’s -- Gerber questioned the motives of creditors, demanding lawyers disclose their clients’ investments. Bondholders who hold credit-default swaps, a form of debt insurance, objected to an injunction.

“I need to know the extent to which clients’ interests could be motivated by recoveries on anything other than the underlying security -- short positions, credit-default swaps, other kinds of derivatives,” Gerber said at the Feb. 13 hearing. “You get the picture.”

Gerber, who also handled the $30 billion Global Crossing Ltd. bankruptcy, has also expressed cynicism about the way hedge funds operate in his court, as he did at a March hearing for a bankrupt home-furnishings retailer. Lawyers for Harbinger Capital Partners and Prentice Capital Management LP argued that a settlement in the case gave too much power to another fund, Y.A. Global Investments LP.

Gerber said, “When my nine-year-old asks me what I do for a living, I say, ‘I decide inter-hedge fund disputes.’”

GM’s bankruptcy case is In re General Motors Corp., 09- 50026, U.S. Bankruptcy Court for the Southern District, New York (Manhattan).

To contact the reporters on this story: Tiffany Kary in New York Bankruptcy Court at tkary@bloomberg.net; David Voreacos in Newark, New Jersey at dvoreacos@bloomberg.net.

Last Updated: June 2, 2009 11:57 EDT