Fate of GM in hands of U.S. bankruptcy judge

By Emily Chasan and Phil Wahba

NEW YORK (Reuters) - A federal bankruptcy judge will decide the immediate fate of General Motors Corp's effort to quickly sell its best assets to a group funded by the U.S. government, after a three-day court hearing concluded on Thursday.

The iconic U.S. automaker wrapped up the final day of its sale hearing in U.S. bankruptcy court in Manhattan by asking Judge Robert Gerber for approval to sell its best assets to a "New GM" funded by the U.S. government.

GM is seeking approval for the sale just one month after filing for bankruptcy protection. Judge Gerber asked GM's attorneys to submit papers to him by Friday and is expected to rule before July 10 -- the date after which the government has said it could stop funding GM.

In court on Thursday, a group of dissenting bondholders urged Judge Gerber to block the sale, calling it the first attempt at "Chapter 11 nationalization" and arguing the government was trying to circumvent the law.

But GM's lead bankruptcy attorney, Harvey Miller of law firm Weil Gotshal & Manges, told Judge Gerber that anything but approval of the sale would have "catastrophic" and "irreversible" consequences for GM and the auto industry.

"The objectors are asking your honor to play Russian roulette," Miller told Judge Gerber, in response to claims from the bondholder group that GM could pursue a more traditional Chapter 11 reorganization plan rather than a fast track sale.

"These are assets that will deteriorate in value, and that deterioration will be felt by all stakeholders," Miller said, noting that June auto sales this week showed GM was losing market share to Ford Motor Co.

This week GM's chief executive, Fritz Henderson, and Harry Wilson, a senior member of the Obama administration's autos task force, told the court the sale is GM's only option for survival. Henderson said he does not expect GM to make money in