WorldCom MCI Bondholders Bankruptcy Judge, Reorganization

McGuire, Pigott Seen as Front-Runners for Top Court Slot

Yesterday marked the deadline for applications to fill Judge Richard C. Wesley's spot on the Court of Appeals, and most observers suspect the race is between former governor's counsel James M. McGuire and Appellate Division, Fourth Department, Presiding Justice Eugene F. Pigott Jr. Mr. McGuire, now of White & Case in Manhattan, is close to and highly respected by Governor George E. Pataki. He was a central figure in the administration's mid-1990s attacks on the Court's alleged liberalism and a key player in virtually all policy decisions between 1995 and 2003. If Mr. Pataki appoints Mr. McGuire, it would mark the third straight pick from his inner circle, a likely point of controversy. Also, if Mr. Pataki bypasses Justice Pigott, a Buffalo Republican, there would be no one on the Court from west of Albany. Mr. Pataki is likely to receive a list of seven candidates by mid-October from the Commission on Judicial Nomination. Once received, he has a minimum of 15 days and a maximum of 30 days to announce his choice. Also among the potential candidates are former State Bar Presidents James C. Moore of Harter, Secrest & Emery in Rochester, and Steven C. Krane of Proskauer Rose in Manhattan; Guy Miller Struve of Davis Polk & Wardwell in Manhattan; Albany Law School Professor Michael J. Hutter Jr. of Powers & Santola; Syracuse Law School Dean Daan Braveman; and Rochester Supreme Court Justice Robert J. Lunn. -- John Caher

Judge's Failure to Disqualify Himself Leads to Award Vacancy

Southern District Judge Milton Pollack's failure to disqualify himself from a case involving Chase Manhattan Bank prompted the Second Circuit yesterday to vacate a $70 million award to Chemical Bank and five other banks in an insurance dispute. Judge Pollack, his wife and a family trust had purchased between $250,000 and $300,000 in stock after the merger of Chemical and Chase Manhattan. The case had been transferred to the judge after the 1996 merger and the caption on the case, as well as the lawyers, continued to refer to the old name of Chemical Bank. But even though Judge Pollack divested himself of the stock after the case was remanded to him, the circuit said the new status of the bank "and its name were no secret" when he prepared his July 1997 decision. -- Mark Hamblett

Agreement Reached on MCI Reorganization

MCI has reached an agreement with two groups of creditors who had objected to the company's plan to emerge from Chapter 11 bankruptcy. An ad hoc committee of MCI trade creditors and a group of junior MCI bondholders had objected to the consolidation of their claims with claims against WorldCom, which acquired MCI in 1998 and recently adopted the MCI name. The proposed settlement would pay the two groups of creditors $385 million more than they would previously have received under MCI's reorganization plan. The confirmation hearings on MCI's plan, which were to have begun Monday, were adjourned yesterday by Southern District Bankruptcy Judge Arthur J. Gonzalez to permit the settlement agreement to become final. The confirmation hearings are expected to resume tomorrow afternoon. -- Anthony Lin

Drug Giant Hit With $1 Million SEC Fine

Pharmaceutical giant Schering-Plough Corp. yesterday agreed to pay a $1 million civil fine to settle allegations that it illegally revealed financial information to stock analysts and some of its biggest investors ahead of the public last fall. The company's former CEO Richard Koganis is paying $50,000. Schering-Plough and Mr. Koganis neither admitted to nor denied the allegations in the settlements with the Securities and Exchange Commission. They also agreed to refrain from future violations. The SEC brought the action under a three-year-old rule known as Regulation FD, or Fair Disclosure, which forbids companies from providing information to Wall Street insiders ahead of the public. Schering-Plough, based in Kenilworth, N.J., is among a handful of companies to be cited under the rule. -- Associated Press

Republicans Seek Judicial Candidates

Judges and lawyers interested in seeking the Republican Party's nomination for the Supreme Court in the Second Judicial District, which covers Brooklyn and Staten Island, should contact Aaron D. Maslow, Second Vice Chairman of the Kings County Republican Party at [718] 375-8211 to start the application process. The party will name candidates for eight Supreme Court judgeships at its Sept. 18 convention.

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