Nonlinear simulations of the gradient drift instability with inertial effects for the high latitude plasma patches demonstrate that the initial cross-field elongated structures, driven by the gradient drift instability, are unstable to the Kelvin-Helmholtz instability and to the generation of sheared flows. The shear flow develops on the scale-length of the irregularities. Both these processes arise from the nonlinear inertial term. The computed density and velocity fluctuation levels are of the order of the observed values. The combined effect of parallel dynamics as well as secondary instabilities prevent the patch from disintegrating for hours. ¿ 1999 American Geophysical Union