“…Nevertheless, Kroszner and Strahan (2001) and Güner, Malmendier, and Tate (2008) find evidence of conflicts of interest between board directors appointed by creditors and shareholders. For example, Ferreira, Ferreira, and Mariano (2017) find an increase in bankers' representation on corporate boards following the violations in loan covenants. Given that CDS initiation could be followed by reduced lender interest in monitoring the company, but heightened shareholder interest (Kim et al 2017), we expect the opposite of trends documented in Ferreira et al (2017), that is, a shift in board of directors towards shareholder interest, all else held equal.…”