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I am having some problems understanding the difference between shareholder-creditor conflict and debt-equity conflict.

I understand what the shareholder-creditor conflict is about, but when I try to understand debt-equity conflict I get to the conclusion that it is the same since

-> A shareholder owns a piece of the company in the form of stock (equity).

-> A creditor lends money to the company (debt)

I am asking because I am reading two articles where the main conflict of interest in the first article is shareholder-creditor conflict, but in the second article the main conflict is debt-equity..

  1. article: "The leverage ratchet effect" by Admati et. al. (2015)
  2. article: "A theory of LBO activity based on repeated debt-equity conflicts" by Andrey Malenko and Nadya Malenko (2015)
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No. Creditor and debt holders are not necessarily the same. The firm owes money to both. You can have debt holder vs other creditor conflict, who has priority and who has what charge to which asset.

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