Judge Gonzalez brings Enron, WorldCom experience to Chrysler bankruptcy

Christine Tierney / The Detroit News

Chrysler LLC and the Obama administration, hoping for a speedy bankruptcy process for the automaker, may be feeling encouraged at the selection of the judge presiding over the case.

Arthur J. Gonzalez, a U.S. bankruptcy judge for the Southern District of New York, is accustomed to complicated cases, having dealt with two of the largest and thorniest bankruptcies in U.S. corporate history: Enron Corp. and WorldCom.

Attorneys who have practiced before Gonzalez say the 62-year-old marathon runner is a fair and very capable judge. "He's brilliant, he's fair, he's judicious, careful, a straight arrow," said Martin Bienenstock, the lead attorney representing Enron during its Chapter 11 bankruptcy that started in 2001.

"He's an independent thinker, and if there's a legal way to obtain the optimal result for all parties, he'll point the litigants toward that," said Bienenstock, who practices with Dewey & LeBoeuf in New York and teaches at Harvard Law School.

Those qualities will be useful in the case of Chrysler, which filed for bankruptcy Thursday after a few creditors balked at the U.S. Treasury's offer to pay Chrysler's lenders $2.25 billion in cash to settle the automaker's $6.9 billion debt.

Gonzalez was assigned the Chrysler case, as well as the Enron and WorldCom cases, randomly -- as is the custom at the Manhattan court.

Obama administration officials hope Chrysler will emerge from bankruptcy within two months. But many legal experts question that timetable. The WorldCom bankruptcy lasted 15 months, and Enron's went on for more than 2 1/2 years. Delphi Corp. filed for bankruptcy in 2005 and hasn't emerged.

"While Chrysler is a big case, based on the size of the business, it may not be as complex as Enron," said Robert Gordon, head of the corporate restructuring and bankruptcy practice group at Detroit-based Clark Hill PLC.

"Enron was a very complex case. The judge had to understand numerous and complex corporate structures and transactions. Here, the problems are probably not going to be as granular," he said.

"The bankruptcy has been prepared and filed with a clear focus and a potential exit strategy that is likely to limit the range of issues and the amount of court time that the case will require," Gordon said.

He said he had not practiced before Gonzalez, but "my understanding is that he's very capable."

"Gonzalez, I think, is harder to ruffle than a lot of folks," Nancy Rapoport, a law professor at the University of Nevada, Las Vegas, and editor of a book on Enron's collapse told Bloomberg News. "He's so experienced by now that if he hasn't seen it all, he's seen most of it."

Born in Brooklyn, Gonzalez taught in the New York City public schools from 1969-82 -- the year he graduated from Fordham Law School.

From 1982 until 1988, he was a staff attorney with the Manhattan District Counsel's Office of the Internal Revenue Service, then spent three years in private practice. In 1990, he received a master's degree in law from New York University.

From 1991 until 1993, Gonzalez was an Assistant U.S. Trustee for the Southern District of New York. The U.S. Trustee's Office oversees bankruptcy proceedings. He then became U.S. Trustee for New York, Connecticut and Vermont, and in 1995 was appointed to the bankruptcy court for the Southern District of New York for a 14-year term.

ctierney@detnews.com (313) 222-1463 David Shepardson contributed to this story.