IN RE: APPLIANCE PRO (2026)

ORDER CONTINUING CONFIRMATION HEARING AND SETTING DEADLINES FOR SELECTIVE INSURANCE COMPANY OF SC TO FILE PROOF OF CLAIM, OBJECT TO PLAN, OR VOTE ON PLAN

THIS MATTER is before the Court on the (a) confirmation of the Modified Plan of Reorganization filed by Appliance Pro, LLC (“Debtor”) and the Addendum thereto filed on June 15, 2025 (collectively, the “Plan”)¹ and (2) the Amendment to Schedule E/F that Debtor filed on June 19, 2026.² A confirmation hearing on the Plan was scheduled for June 25, 2026. Debtor's counsel, Debtor's principal, and the Subchapter V Trustee were present. No outstanding objections remained to the Plan. The Court, however, raised concerns regarding Debtor's amendment to Debtor's Schedule E/F changing the amount of the claim of Selective Insurance Company of SC (“Selective Insurance”) from an undisputed debt in the amount of $124,434.90 to $0.00. The amendment was filed after the deadlines to file proofs of claim, object to the Plan, or vote on the Plan had expired. At the hearing, Debtor's counsel indicated that Debtor's insurance broker had contact with Selective Insurance and it had acknowledged that it was only owed $27.00 for a postpetition debt; however, no evidence was presented in support of that assertion or to alleviate the Court's concern of lack of due process.

By way of background, Debtor commenced a subchapter V case on January 12, 2026. The deadline for non-governmental creditors to file a proof of claim was set for March 23, 2026.³ Debtor amended its schedules on April 8, 2026, after the deadline to file non-governmental proofs of claim had expired, to add Selective Insurance on Schedule E/F as having an undisputed claim in the amount of $124,434.90.⁴ On April 9, 2026, Debtor also sought an extension of the deadline to file a plan, stating that:

On or about April 2, 2026 the Debtor received notice from Selective Insurance of the results of its insurance audit for the period of December 16, 2024 to December 16, 2026 which alleges pre-petition liability for additional premiums in the amount of $124,434.90․ The Debtor and its Insurance Broker are working to find an alternative policy that is more consistent with the Debtor's operating budget and believe that they have identified a suitable carrier.5

Debtor's Plan was filed on May 12, 2026, classifying Selective Insurance in Class 2 (General Unsecured Claims) and noting next to its claim “disputed.” The Plan further indicated that non-priority unsecured creditors holding allowed claims will receive distributions “which the proponent of this plan has valued at between 4.98 and 6.13 cents on the dollar based upon the determination of the disputed claim of Selective Insurance Company of SC.” Making a notation in a chapter 11 plan next to the name of a claimant classified as a general unsecured claimant as being “disputed,” however, does not change the “allowed” nature of a claim without a formal objection. See Fed. R. Bankr. P. 3007. Because Debtor had listed Selective Insurance's claim as a non-disputed, liquidated, and noncontingent debt in its schedules, there was no need for Selective Insurance to file a claim.⁶ Moreover, because there was no proof of claim filed, there was no claim for Debtor to object to. 11 U.S.C. § 502(a) (“A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed unless a party in interest ․ objects.”).

The Order Setting Confirmation Hearing and Related Deadlines ⁷ set June 15, 2026, as the deadline for creditors to vote on the Plan or object to confirmation. As of that deadline, Selective Insurance was deemed to have an “allowed” claim in the amount listed on Debtor's Schedule E/F. Selective Insurance did not return a ballot casting a vote. Other creditors in the general unsecured class voted to accept the Plan; accordingly, Debtor's Ballot Tally treats Class 2 as having accepted the treatment proposed in the Plan.⁸ Four days after the deadline to object or vote on the Plan—on June 19, 2026—Debtor amended Schedule E/F to reduce the amount it deemed owed to Selective Insurance to $0.⁹

According to Debtor's Ballot Tally, all classes voted in favor of the Plan, thus rendering the Plan confirmable as consensual pursuant to 11 U.S.C. § 1191(a). The Court, however, raised concerns regarding the last-minute amendment of Schedule E/F after the deadlines set forth in the Order Setting Confirmation Hearing and Related Deadlines without providing sufficient notice to Selective Insurance to (a) file a proof of claim and/or (b) object to the Plan based on the late amendment.

At the hearing, Debtor's counsel also raised the possibility that Debtor may dispute the claim filed by the Internal Revenue Service on June 1, 2026, asserting a debt owed in the amount of $2,000, with $1,700 asserted as holding priority status. See POC #8-1.

Based on the arguments raised at the hearing and the record before the Court, the plan would be confirmable as a consensual plan under 11 U.S.C. § 1191(a) if Selective Insurance does not vote to reject the Plan or does not contest the amount of the claim as set forth in the Amended Schedule asserting its prepetition debt is $0.00. However, to provide Selective Insurance with an opportunity to file a proof of claim and object to or cast a vote on the Plan, the Court concludes as follows:

IT IS HEREBY ORDERED that the confirmation hearing on the Plan filed on May 12, 2026, and modified on June 15, 2026, is continued to July 21, 2026 at 11:00 a.m. at the J. Bratton Davis United States Bankruptcy Courthouse, 1100 Laurel Street, Columbia, South Carolina 29201.

IT IS FURTHER ORDERED that Selective Insurance shall have until July 14, 2026, to (a) file a proof of claim, (b) file a response or objection to the Plan, and/or (c) vote on the Plan. The ballot must be either filed electronically or mailed to the Court at 1100 Laurel Street, Columbia, SC 29201 so that it is received by no later than July 14, 2026. A copy of the ballot should also be served upon William Harrison Penn, the attorney for the debtor, at the following address: Penn Law Firm, LLC P.O. Box 11332, 1517 Laurel Street, Columbia, SC 29211-1332, by the same deadline.

IT IS FURTHER ORDERED that to the extent that Selective Insurance files a proof of claim, Debtor shall have until July 17, 2026, to file an objection to the proof of claim of Selective Insurance and serve it on Selective Insurance.

IT IS FURTHER ORDERED that any objections to any proofs of claim (with the exception of any proof of claim that Selective Insurance may file by the deadline set forth above) shall be filed no later than July 10, 2026.

IT IS FURTHER ORDERED that absent any further modification to the Plan, under no circumstances should the proposed recovery for allowed unsecured claims change from the range contemplated under the Plan.

IT IS FURTHER ORDERED that, absent any further modification of the Plan, no other creditor or interest holder needs to vote on the current Plan as the deadline for other creditors and parties in interest has passed and the votes previously cast have been deemed counted.

IT IS FURTHER ORDERED that, if (a) Selective Insurance does not file a proof of claim, object to the Plan, or cast a ballot objecting to the Plan or (b) Debtor files no objections to any proofs of claim, the Plan will be deemed confirmable as a consensual plan pursuant to 11 U.S.C. § 1191(a) and the Court may enter an order confirming the Plan as consensual and cancel the hearing.

IT IS FURTHER ORDERED that notice of this Order shall be delegated to Debtor. By not later than 12:00 PM on June 26, 2026, Debtor shall serve (1) a copy of the Plan, this Order, and a ballot on Selective Insurance via overnight mail and, to the extent available, email and (2) a copy of this order on the creditor matrix via regular first-class U.S. mail. Debtor shall promptly file a certificate of service.

AND IT IS SO ORDERED.

FOOTNOTES

1.   ECF No. 61, filed on May 12, 2026, as modified, ECF Nos. 76 and 78, filed on June 15, 2026.

2.   ECF No. 82, filed on June 19, 2026.

3.   ECF No. 10.

4.   ECF No. 51, filed on April 8, 2025.

5.   ECF No. 52.

6.   Despite the fact that the proof of claim bar date had passed by the time Schedule E/F was amended to add Selective Insurance's debt, by scheduling the claim as undisputed, Selective Insurance was not required to file a proof of claim. See Fed. R. Bankr. P. 3003(b)(1) (“An entry of the schedule of liabilities filed under § 521(a)(1)(B)(i) is prima facie evidence of the validity and the amount of a creditor's claim-except for a claim scheduled as disputed, contingent, or unliquidated. Filing a proof of claim is unnecessary except as provided in (c)(2).”)

7.   ECF No. 62, entered May 13, 2026.

8.   ECF No. 87, filed on June 24, 2026.

9.   ECF No. 82. As reflected on the Certificate of Service attached to the Amended Schedules, Selective Insurance was served with a copy of amended Schedule E/F.

Elisabetta G. M. Gasparini, US Bankruptcy Judge