Questions surround Spain's homologación regime

Author: | Published: 24 Apr 2017

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 proceedings

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 sacrifice....



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