By Peg Brickley 

Abengoa on Thursday won preliminary court approval for its proposal to appease U.S. creditors, an essential element of the restructuring deal that is keeping the renewable-energy company out of bankruptcy in Spain.

U.S. Bankruptcy Judge Kevin Carey found the 2,300-plus-page outline of chapter 11 exit plans for the Spanish company's U.S. affiliates contains sufficient information to allow creditors to decide how to cast their ballots.

Once the votes are in, the Abengoa U.S. units that are operating under the protection of chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del. will return to Judge Carey to seek confirmation of the U.S. bankruptcy plans.

The Spanish company needs to keep the U.S. units on track for resolving their bankruptcies to provide reassurance to the lenders that are stepping up to support a massive restructuring deal that will save the multinational company, lawyers for the U.S. units told Judge Carey.

Thursday's hearing was a test of whether the Abengoa U.S. affiliates had provided enough financial information to creditors. An early version of the chapter 11 plan report offered scant detail, as a result drawing criticism from a federal bankruptcy watchdog and creditors.

Unsecured creditors of the Abengoa U.S. affiliates are still working to digest the load of information added recently to the disclosure statement, the document explaining the plan that is sent out with ballots, said Christopher Donoho, lawyer for the committee representing those creditors.

The committee doesn't want a delay in the U.S. proceeding to hold up the Spanish process, but it still has questions about what junior creditors are being offered, Mr. Donoho said.

"We still have real concerns around confirmation but we're going to hopefully work through those," he said Thursday .

Nationwide Mutual Insurance Co. and RLI Insurance Co., two creditors, have called for the appointment of an examiner, or an independent investigator, to probe the Spanish company's finances. The U.S. affiliates said in their chapter 11 plan papers that such a probe isn't a good idea. The companies and creditors are already looking at the issues with a view toward improving creditor recoveries, Abengoa said.

A multinational clean technology powerhouse, Abengoa was dragged into trouble due to Spain's 2013 economic crisis, when the government cut back subsidies for solar and wind power companies. Many companies failed, and Abengoa survived only by issuing more than $5 billion in debt.

Some of that debt was guaranteed by U.S. affiliates. It is to be dealt with under the master restructuring agreement that revamps the Spanish parent's balance sheet, as well as under the chapter 11 plans that apply to the U.S. units.

Founded in Seville, Spain, in 1941, Abengoa develops clean-energy projects world-wide. After a new investment deal fell through, the company launched preliminary insolvency proceedings in Spain last year. The move bought Abengoa time to negotiate a restructuring agreement with creditors and avoid filing bankruptcy in Spain. Bankruptcy proceedings in the U.S. helped shield U.S. assets during international restructuring talks.

--Jacqueline Palank contributed to this article.

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

October 27, 2016 14:09 ET (18:09 GMT)