The primary phase of the GM bankruptcy proceeding has ended. Attorneys for the automaker and a myriad of creditors and affected parties wrapped up their closing arguments today with the creditors telling the judge to slow down the process and resolve all the potential problems first and the automaker arguing that the sale must be approved immediately:

Earlier today a lawyer representing GM’s small bondholders urged a judge to call the government’s bluff that it will stop funding the automaker’s restructuring if a sale is not approved by July 10.

The lawyer, Michael Richman, objects to GM using Section 363 of the Chapter 11 bankruptcy code to try to divide its assets and sell the best to form a new GM. The bad assets would remain in court as part of the old GM and be liquidated, leaving many creditors with lawsuits, claims and benefits left behind in bankruptcy court.

“Bankruptcy courts call the bluffs of bullying lenders and purchasers all the time,” Richman said. “You go to a Broadway show, you expect an orchestra. For a 363 transaction, you need a deadline. It’s part of the scenery, part of the show.”…

The objectors are endangering thousands of jobs, the welfare of communities that rely on GM and imperiling the automaker’s assets by betting the government is lying about its intention to pull its funding, the automaker’s lawyer Harvey Miller said.

“This is an awesome gamble,” he told the judge in his rebuttal. “It ignores the interests of all the economic stakeholders. They are essentially asking to play Russian roulette.”

The fact is, both sides are right. Yes, the government is bluffing about the July 10 deadline; as long as the court is going to allow the sale to go through eventually — and it is — then the government is not going to pull the plug on the interim financing and let the tens of billions of dollars already spent keeping the company alive go to waste.

But that does not mean that time is irrelevant. Every day that the company sits in bankruptcy court is another day that factories are shut down, workers are idled and drawing down government revenues rather than adding to them, and the auto suppliers and ancillary businesses that rely on the automobile industry are at higher risk of bankruptcy themselves. The faster those factories are restarted, the better for everyone involved.

We’ve already seen how this movie ends; it ends with the judge approving the sale and dismissing the objections of various groups who want to stop that from happening — some of whom do have legitimate complaints. The fact is that some people are going to lose their investments in this fight and there is no way to avoid it. The only alternative is for a whole lot more people to lose.

Judge Gerber could rule as early as this afternoon or he may wait until after the July 4 holiday.