peaches58 ~ I live in the corporate world and I'm surrounded by sharks. Here's what I have learned.
If you don't have anything to hide, you do your job to the best of your ability and you act honorably....you have nothing to worry about. Communicate with your managers about what you are doing, keep good solid relationships with people around you and keep regular hours. Do all the things we know are good - and good things happen.
Whenever I ignore my instincts on who people are - I'm ALWAYS sorry. So, trust that your instincts about this newly demoted shrew are correct. Never give her any information that would hurt your reputation. Drinking, your new sobriety, etc. would fall in the "do not discuss" category.
BUT, don't and I repeat don't ~ overreact to her. Be unavailable whenever you can, give her superficial information but accurate information, be polite and confident. Be friendly though. It's a fine balance. She needs you more than you need her I suspect?
I'm on day 8 of sobriety and I already feel I'm much sharper at work. So NOT drinking would help you more in your situation. I know it's counterintuitive.
Stress is our body's reaction to danger. When we were cavemen, that fight or flight instinct kept us alive. It's deep within humans. We alcoholics like the flight reaction more than the fight.....maybe I'm wrong about that, but I feel like running away to a bottle a lot. So if you feel the need for flight ~ stop and think fight instead.
You have nothing to fear here. From the sounds of it, you will really outshine her. Stay sharp and take her head on! It can be exhilerating. I hope I spelled exhilerating right....LOL!
You can do it! Best of luck to you.