Flynn v. Bankowski (In re Flynn), 402 B.R. 437, 443-45 (B.A.P. 1st Cir. 2009) (Carlo, Deasy, Kornreich) (Citing In re Szostek, 886 F.2d 1405 (3d Cir. 1989), failure of lienholder to object to balloon payment could be acceptance of plan under § 1325(a)(5)(A) notwithstanding equal payment requirement in § 1325(a)(5)(B)(iii)(I); remand necessary because appellate record not sufficient to determine whether notice
was adequate to support acceptance by silence. “The Bankruptcy Code, the Bankruptcy Rules, and the Local Rules .. . are silent as to what constitutes a secured claim holder’s acceptance of a chapter 13 plan for purposes of § 1325(a)(5)(A). However, the courts that have considered the question have overwhelmingly concluded that
a secured creditor’s lack of objection may constitute acceptance of the plan for purposes of § 1325(a)(5)(A). . . . We adopt the Third Circuit’s view that acceptance may occur upon a secured creditor’s failure to file a timely objection to a chapter 13 plan. . . . Implied consent requires, however, that the secured claim holder has received both proper and adequate notice and proper and adequate service…. At a minimum, due process requires that a proper and adequate notice contain a clear, open, and explicit statement of a secured creditor’s treatment in a chapter 13 plan before the creditor’s failure to object will be deemed implied acceptance. . . . If the Mortgagee failed to timely object to confirmation after receiving adequate and proper notice and adequate and proper service, then it is deemed to have impliedly acceptance the chapter 13 plan for purposes of § 1325(a)(5)(A), and the failure to comply with the provisions of § 1325(a)(5)(B) would not be grounds to deny confirmation.”).
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