Daily News from New York, New York • 44

DOW JONES 500 NASDAQ Mam 24.15 24.49 170.81 952.03 9,090.09 1,381.12 Universal music boss not shaken by uncertainty if A '-Vi 1 1 3 By PHYLLIS FURMAN DAILY NEWS BUSINESS WRITER French regulators swooped into the Paris headquarters of Vivendi Universal late yesterday, launching a probe into its accounting practices another blow to the shaky media empire. WorldCom watchdog Richard Breeden has taken conflict-of-interest heat EJireeinbGii Investigators from the Commission des Operations de Bourse France's equivalent to the SEC poured over Vhr-endi's books on the prowl for problems dating to the tning of last year. The probe comes two weeks after Vivendi booted CEO Jean-Marie Messier, who failed in his attempt to turn the former water company into a media powerhouse. French regulators opened fire on Vivendi on the same day that the cash-strapped media giant secured a $990 million loan from its banks, giving it enough cash to keep tminer frw onAthar tfiraa mo storaGHgeir to coGnffflBcQ: vision after Morris was ousted from Time Warner. Bronfman later sold Seagram to Vivendi.

Less certain, is how Morris will fare under media mogul Barry Diller, front-runner to take charge of Vivendi's entertainment assets. While Morris said he hasn't been asked to make any cuts in his budget, Diller is scrutinizing spending at Universal Pictures, which he already runs. Morris can point to his pop chart dominance, with Universal holding five out of the top six slots, including No. 1 record, Nelly Nellyville. Last week, the company accounted for four out every 10 albums sold in the country.

Morris said "I believe we will have more profits and sales, than last year," when Universal posted an operating profit of $1.16 billion. Analysts predict that profits will fall 6. Universal's profits plummeted 24 in the first quarter, and the second quarter is not expected to be strong. Morris said the music group's release schedule is weighted toward the fourth quarter of the year, when it will debut CDs from such big sellers as Limp Biz-kit, Eminem and Shania Twain. "It creates uncertainty and the stock market does not deal well with uncertainty," said James Kaufman, president of James M.

Kaufman Capital Associates. An SEC spokesman declined to comment, but veteran media analyst Hal Vogel said, "the SEC might follow suit." Meanwhile, the Vivendi meltdown has created tremendous uncertainty for the bosses of its two entertainment units, Universal Pictures and the world's largest music company, Universal Music Group. But Universal Music chairman Doug Morris told the Daily News that he has "absolutely no anxiety" about the recent corporate shakeup that will likely put the music company in the hands of a new owner. "Why would they change anything?" Morris said. "We're doing the best we've ever done." Morris' future is made more secure by the growing power of Edgar Bronfman the Seagram scion who orchestrated the ouster of Messier.

Bronfman, a longtime backer of Morris, tapped the executive to run Seagram's music di Doug Morris is confident, since music unit is doing the "best we've ever done." and when did they reveal it?" the source said. The regulators' moves helped push down Vivendi's shares to as low as $16.60, before the stock closed at $17.60. months. The investigation is expected to center on a series of questionable deals by Messier. One insider said the investigators are looking into whether the company appropriately disclosed that it was running out of cash.

"When did the company know it had liquidity issues GfloftGnes, Ooaons onevj (Msenflmni chapta By TIMOTHY 1 BURGER DAIiY NEWS WASHINGTON BUREAU WASHINGTON A top securities lawyer tapped last week as WorldCom's $800-an-hour corporate monitor was accused of potential conflicts of interest as trustee of a 1 billion bankruptcy case, the Daily News has learned. Richard Breeden acknowledged in an interview that he had been criticized while handling the contentious fraud and bankruptcy case of the Bennett Funding Group in Syracuse. But the former Securities and Exchange Commission chairman chalked it up to the fact that the case caused "a lot of anguish and a lot of controversy." He said he had no conflicts of interest. "I did everything I was required to do." Breeden said he was tapped to clean up the Bennett Funding mess after Bennett officials some of whom went to prison ran it into bankruptcy in one of the big-gest-ever ponzi schemes. As Bennett trustee, Breeden was accused of a conflict for his 1997 purchase of 3,000 shares of stock in a Bennett subsidiary, Equivest.

Bennett said he made the purchase as a vote of confidence. But New York University bankruptcy expert Barry Adler said such purchases pose a "potential conflict of interest." Bennett also reportedly did not disclose his purchase when seeking court, permission for transactions with Bennett that tie said were intended to "enhance the value" of the stock. Breeden told the Daily News he had no conflict but donated the $15,000 in stock to Syracuse University because "I'm a standup guy." Breeden also caught flak from bankruptcy Judge Stephen Gerling when he signed a consulting pact with accounting firm De-loitte Touche. Gerling made what Breeden called the "rather unusual decision" that he should certify "no client anywhere in the world of Deloitte Touche had ever invested in Bennett." Breeden dropped the Deloitte deal instead. Bennett said he's pulled off what he believes is an unprecedented feat by ensuring that creditors in the Bennett ponzi scheme bankruptcy get back an average of 50 of their money.

rU By ERIC HERMAN DAILY NEWS BUSINESS WRITER Where once shoppers bought books, they will now buy cut-price clothes and take out loans another stage in the transformation of Columbus Circle. One of the city's prime retail spots the historic home of Coli the landlord. By signing Daffy's and Fleet, Roseman landed tenants eager to take advantage of Columbus Circle's rebirth. The new AOL Time Warner Center will have 360,000 square feet of shopping, of which 80 has already been leased at rents ranging from $100 Jfm DAILY NEWS seum Books has been leased to two new tenants, the Daily News has learned. The space on the to $50U per square foot, according to Mitchell Friedel of the Palladium Company.

Stores will include high-end retailers UK northwest corner of W. 57th Street and Broadway will be occupied by discount clothing chain Daffy's and by Fleet Bank. For 27 years, Coliseum Books catered to readers who didn't mind the store's no-frills decor or its haphazard organization. But the rent got too high. Joseph Moinian, owner of the building that also serves as Newsweek's New York headquarters, wanted to triple the rent to $200 per square foot from $70 per square foot.

The store closed in January. "We're dividing it for two tenants," said broker Jeffrey Roseman of Newmark like Hugo Boss. And at the corner of W. 58th St. and Eighth Avenue, broker Faith Hope Conso-lo just leased 10,000 square feet in 4 Columbus Circle to Duane Reade for more than $200 per square foot, double the previous rent.

The demand is very strong because of the new development," Consolo said. Daffy's will take about 13,000 square feet 5,000 on the ground level and 8,000 in the basement, Roseman said. Fleet will take about 3,000 square feet at the ground level. The rents are said to be close to the $200 per square foot Moinian sought, but the landlord declined coin- I 8 T3 THOMAS MONASTER OAKY NEWS The Coliseum Books site wH be occupied by Daffy, and Fleet Bank. New Spectrum Retail, who represented ment and a Daffy's executive denied that..