Spain’s homologation proceedings
haven’t yet clarified whether contingent claims
can be crammed down or whether the relevant lenders have voting
rights, unlike under traditional bankruptcy
The homologation (homologación) proceeding is a
court-sanctioned workout negotiated out of court by a borrower
and its lenders, aimed at restructuring the borrower's
financial debt. It establishes protection against clawback,
extends the workout over financial claims (provided certain
majorities are achieved), and gives an enhanced treatment to
new money in a potentially subsequent bankruptcy proceeding.
Since 2014, homologation has been profusely used as an
alternative to bankruptcy to overcome financial distress.
Spanish case law is becoming rich and diverse enough on certain
controversial issues, in particular, when dealing with
objections to homologation based on disproportionate