A CSFB-backed distressed-debt specialist who is believed to be

WorldCom's

largest creditor reportedly might try to install former New York City Mayor Rudy Giuliani at the company's helm.

David Matlin, whose fund has spent $300 million for about 10% of WorldCom's debt, recently met with newly appointed CEO Michael Capellas, whose high-profile poaching from

Hewlett-Packard

(HPQ) - Get Report

led some to believe a turnaround was imminent at the bankrupt carrier.

But, according to

The Wall Street Journal

, Matlin has started a fund with Giuliani aimed at buying up to one-third of WorldCom's outstanding bonds, a stake that could give them effective veto power at the company and the right to name board members.

Matlin is expected to ask U.S. Bankruptcy Court Judge Arthur Gonzalez to accept a reorganization plan that would have Giuliani as chairman, the

Journal

reported.

WorldCom filed for bankruptcy protection in July after revealing a massive bookkeeping scandal that has led to some $9 billion in restatements.