Case Doc 540 Filed 12/15/17 Entered 12/15/17 16:31:16 Desc Main Document Page 1 of 23 UNITED STATES BANKRUPTCY COURT DISTRICT OF NORTH DAKOTA

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1 Case Doc 540 Filed 12/15/17 Entered 12/15/17 16:31:16 Desc Main Document Page 1 of 23 UNITED STATES BANKRUPTCY COURT DISTRICT OF NORTH DAKOTA In re VANITY SHOP OF GRAND FORKS, INC., Case No.: Chapter 11 Debtor. / NOTICE OF FIRST AND FINAL APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES OF LUIS SALAZAR, ESQ., CONSUMER PRIVACY OMBUDSMAN FOR THE PERIOD OF OCTOBER 27, 2017 THROUGH DECEMBER 6, 2017 TO: Counsel for the Debtor, the Office of the United States Trustee for the District of North Dakota, Official Committees appointed in this case and any party or counsel having appeared in this case. NOTICE IS HEREBY GIVEN that Luis Salazar, Consumer Privacy Ombudsman (the Consumer Privacy Ombudsman ) has filed his First and Final Application for Compensation and Reimbursement of Expenses of Luis Salazar, Esq., Consumer Privacy Ombudsman for the Period of October 27, 2017 through December 6, 2017 [Doc No. 534] (the Fee Application ). A copy of the Fee Application is attached hereto and served upon you. Pursuant to this Court s Order dated December 14, 2017 [Doc No. 536] granting the Consumer Privacy Ombudsman s Motion to Limit Notice of the First and Final Application for Compensation and Reimbursement of Expenses of Luis Salazar, Esq., Consumer Privacy Ombudsman for the Period of October 27, 2017 through December 6, 2017 [Doc No. 534], the Fee Application will be provided to the Office of the United States Trustee, counsel for the Debtor, counsel for the Official Committee of Unsecured Creditors, and any other party or its counsel who has filed a notice of appearance or is registered to receive notice via ECF in the above-captioned case. Additionally, the Consumer Privacy Ombudsman will make a complete copy of the Application available by or other suitable delivery method upon request of (and without charge) any party in interest requesting a copy of the Fee Application to the Consumer Privacy Ombudsman. NOTICE IS FURTHER GIVEN that written objections to the Fee Application, if any, shall be filed with the Clerk of the United States Bankruptcy Court, at Quentin N. Burdick Courthouse, 655 First Avenue North, Suite 210, Fargo, North Dakota , with a copy served upon the undersigned counsel for the Consumer Privacy Ombudsman, within twenty (21) days from the date of the mailing of this Notice. Any objections not filed and served may be deemed waived.

2 Case Doc 540 Filed 12/15/17 Entered 12/15/17 16:31:16 Desc Main Document Page 2 of 23 Dated: December 15, 2017 Respectfully submitted, SALAZAR LAW Consumer Privacy Ombudsman 2000 Ponce De Leon Boulevard, Penthouse Coral Gables, FL Telephone: (305) Facsimile: (305) Luis@Salazar.Law By: /s/ Luis Salazar Luis Salazar, Esq.

3 Document Page 13 of In re UNITED STATES BANKRUPTCY COURT DISTRICT OF NORTH DAKOTA Case No.: VANITY SHOP OF GRAND FORKS, INC., Chapter 11 Debtor. / SUMMARY OF FIRST AND FINAL APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES OF LUIS SALAZAR, ESQ., CONSUMER PRIVACY OMBUDSMAN FOR THE PERIOD OF OCTOBER 27, 2017 THROUGH DECEMBER 6, 2017 Name of Professional: Authorized to Provide Professional Services to: SALAZAR LAW Luis Salazar as Consumer Privacy Ombudsman Date of Appointment: October 27, 2017 Fee Period for which Compensation and Reimbursement is sought: Amount of Compensation sought as actual reasonable and necessary for Fee Period: Amount of Expense Reimbursement sought as actual, reasonable and necessary: This is a October 27, 2017 through December 6, 2017 $13, $33.50 First and Final Fee Application The time expended for the preparation of this First and Final Fee Application is included in this fee application. No prior applications or fee statements have been filed.

4 Document Page 24 of FIRST AND FINAL APPLICATION OF CONSUMER PRIVACY OMBUDSMAN PROFESSIONAL DATE OF BAR ADMISSION POSITION WITH SALAZAR LAW BILLING RATE TOTAL BILLED HOURS TOTAL COMPENSATION Luis Salazar 09/28/1998 Partner $ $5, Kevin L. Cabrera 04/30/2017 Associate $ $5, Ali-Marcelle Lee-Sin Not Applicable Florida Registered $ $2, Paralegal TOTAL: 43.9 $14, BLENDED RATE: $ SUMMARY OF SERVICES FEE PERIOD: OCTOBER 27, 2017 THROUGH DECEMBER 6, 2017 PROJECT SUMMARY DESCRIPTION HOURS AMOUNT Consumer Privacy Ombudsman Report and Related Services SUMMARY OF DISBURSEMENTS EXPENSE CATEGORY 43.9 $14, AMOUNT Research Charges $33.50 Total Disbursements $33.50

5 Document Page 35 of UNITED STATES BANKRUPTCY COURT DISTRICT OF NORTH DAKOTA In re VANITY SHOP OF GRAND FORKS, INC., Case No.: Chapter 11 Debtor. / FIRST AND FINAL APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES OF LUIS SALAZAR, ESQ., CONSUMER PRIVACY OMBUDSMAN FOR THE PERIOD OF OCTOBER 27, 2017 THROUGH DECEMBER 6, 2017 LUIS SALAZAR, CONSUMER PRIVACY OMBUDSMAN (the Consumer Privacy Ombudsman ) submits this first and final Application (the Fee Application ), pursuant to sections 330 and 331 of title 11 of the United States Code, Rule 2016 of the Federal Rules of Bankruptcy Procedure, and Procedure for the United States Bankruptcy Court for the District of North Dakota, for Compensation and Reimbursement of Expenses incurred for the period from October 27, 2017 through and including December 6, 2017 (the Fee Period ), and respectfully states: BACKGROUND 1. On March 1, 2017 (the Petition Date ), Debtor, Vanity Shops of Grand Forks, Inc. ( Debtor or Vanity Shops ) filed a voluntary petition [Doc No. 1] for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of North Dakota. 2. The Debtor operates its business and manages its properties as a debtor and debtor-in-possession, pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in this case. 3. On March 10, 2017, the Office of the United States Trustee for the District of North Dakota (the U.S. Trustee ) appointed an official committee of unsecured

6 Document Page 46 of creditors (the Committee ) pursuant to section 1102(a)(1) of the Bankruptcy Code [Doc No. 118]. 4. On October 3, 2017 the Debtor filed its Motion to Approve Stipulation for Appointment of Consumer Privacy Ombudsman [Doc No. 433]. That Motion was granted by this Court s Order [Doc No. 473] dated October 20, 2017, approving the appointment of a Consumer Privacy Ombudsman in this chapter 11 case. BASIS FOR FEE APPLICATION OF CONSUMER PRIVACY OMBUDSMAN 5. By Notice dated October 27, 2017 (the Appointment Notice ) [Doc No. 487] attached hereto as Exhibit A, the U.S. Trustee appointed Luis Salazar as Consumer Privacy Ombudsman, pursuant to section 332 of the Bankruptcy Code. 6. The Consumer Privacy Ombudsman was appointed to assist the Court in its consideration of the facts, circumstances, and conditions of the proposed sale or lease of personally identifiable information under section 363(b)(1)(B). 7. By this Fee Application, the Consumer Privacy Ombudsman seeks, on a final basis, the allowance, award, and authorization of payment of professional fees in the amount of $14,203.50, and reimbursement of expenses in the amount of $33.50 for the period of October 27, 2017 through and including December 6, A description of the services rendered, and costs and expenses incurred during the Fee Period are attached hereto as Exhibit B and Exhibit C, respectively. 8. All services for which the Consumer Privacy Ombudsman seeks compensation were performed within the scope of his appointment in connection with this chapter 11 case. COMPENSATION PAID AND ITS SOURCE 9. The Consumer Privacy Ombudsman has received no payment and no promises for payment from any source other than the Debtor for services rendered or to be rendered in any capacity whatsoever in connection with the matters covered by this Fee Application. There is no agreement or understanding between the Consumer Privacy Ombudsman and any nonaffiliated person for the sharing of compensation to be received for

7 Document Page 57 of services rendered in this case. The Consumer Privacy Ombudsman has received no retainer for the services rendered in this case. SUMMARY OF SERVICES RENDERED BY CONSUMER PRIVACY OMBUDSMAN 10. The Consumer Privacy Ombudsman has provided services relating to the sale of the Debtor s assets including, among other things, the following: a. review and analysis of Vanity Shops privacy policies associated with and the rewards web-site pages, which were in effect on the Petition Date; b. review and analysis of Vanity Shops rewards program pamphlets provided to customers at all Vanity Shops retail locations to enroll in the rewards program; c. review and analysis of the Memorandum provided by Debtor and its professionals detailing the Debtor s Customer PII collection process and the type of Customer PII collected; d. review and analysis of Vanity Shops e-commerce site e. review and analysis of other Vanity Shops privacy policies, terms and conditions, and web-site pages in effect during the year prior to the petition date, as available on Archive.org; f. review and analysis of the relevant pleadings and papers filed in this chapter 11 case including, among other things, the Declaration of Jill Motschenbacher in Support of Chapter 11 Petition and First Day Motions [Doc No. 26], and the Sale Motion [Doc No. 430] and ancillary documents thereto; g. review and analysis of personally identifiable information collection procedures; h. research applicable Federal, State, and local laws and regulations regarding the privacy of consumer information, as necessary, and review the outcome in comparable situations; and i. communications with counsel regarding sale issues and preparation for and attendance at the sale hearing conducted on November 14, The Consumer Privacy Ombudsman believes that the invoice attached hereto as Exhibit B is in substantial compliance with the Bankruptcy Code, the Bankruptcy

8 Document Page 68 of Rules, the Local Rules of this Court, and the Consumer Privacy Ombudsman s appointment in this chapter 11 case. 12. The Consumer Privacy Ombudsman believes that the services rendered during the pendency of this case were necessary and provided a direct and substantial benefit to the estate and creditors, and that the fees and expenses sought in this Fee Application are reasonable and should be allowed and approved for payment in full. EXPENSES INCURRED BY CONSUMER PRIVACY OMBUDSMAN 13. During the Fee Period, the Consumer Privacy Ombudsman incurred out-ofpocket expenses in the amount of $33.50, all of which were reasonable and necessary in connection with the services rendered. A summary of expense reimbursement requested by category is attached hereto as Exhibit C. PRIOR REQUESTS 14. No prior application, or fee statements have been submitted by the Consumer Privacy Ombudsman. CERTIFICATION OF CONSUMER PRIVACY OMBUDSMAN 15. A Certification in support of this Fee Application is attached hereto as Exhibit D and made a part of this Fee Application. REVIEW OF APPLICABLE LOCAL RULE 16. The Consumer Privacy Ombudsman has reviewed the requirements of the Local Rules of this Court and certifies to the best of his information, knowledge, and belief that this Fee Application substantially complies with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of this Court, and the Consumer Privacy Ombudsman s appointment in this chapter 11 case. NOTICE 17. The Consumer Privacy Ombudsman submits that simultaneously with the filing of this Fee Application, he has filed the Motion to Limit Notice of First and Final Application for Compensation and Reimbursement of Expenses of Luis Salazar, Esq., Consumer

9 Document Page 79 of Privacy Ombudsman for the Period of October 27, 2017 through December 6, 2017 (the Limit Notice Motion ) and the Motion to Reduce Time to File Objections to First and Final Application for Compensation and Reimbursement of Expenses of Luis Salazar, Esq., Consumer Privacy Ombudsman for the Period of October 27, 2017 through December 6, 2017 (the Reduce Time Motion ) and will file a certificate reflecting service of this Fee Application along with the Limit Notice Motion and Reduce Time Motion immediately upon this Court s entry of the Orders relating thereto. WHEREFORE, the Consumer Privacy Ombudsman respectfully requests the Court enter an Order (i) granting this Fee Application on a final basis; (ii) allowing and awarding compensation in the amount of $14, and expenses in the amount of $33.50 for the period of October 27, 2017 through and including December 6, 2017; (iii) authorizing the Debtor to make direct and immediate payment of $14, (representing 100% of fees) and reimbursement of $33.50 (representing 100% of expenses) for a total payment of $14, for the period of October 27, 2017 through and including December 6, 2017; and (iv) granting such other and further relief as this Court deems just and proper. Dated: December 14, 2017 Respectfully submitted, SALAZAR LAW Consumer Privacy Ombudsman 2000 Ponce De Leon Boulevard, Penthouse Coral Gables, FL Telephone: (305) Facsimile: (305) Luis@Salazar.Law By: /s/ Luis Salazar Luis Salazar, Esq.

10 Document Page 10 8 of EXHIBIT A

11 Document Page 11 9 of UNITED STATES BANKRUPTCY COURT DISTRICT OF NORTH DAKOTA In Re: VANITY SHOP OF GRAND FORKS, INC., Debtor. Case No Chapter 11 Case NOTICE OF APPOINTMENT OF CONSUMER PRIVACY OMBUDSMAN Pursuant to the order of this Court entered on October 11, 2017, directing, in part, the appointment of a consumer privacy ombudsman under 332 of the United States Bankruptcy Code (Doc. #442), Daniel M. McDermott, United States Trustee for Region 12, hereby appoints Luis Salazar with an office at 2000 Ponce De Leon Blvd., Penthouse, Coral Gables, FL TEL: (305) as the Consumer Privacy Ombudsman in this case. Attached hereto is Mr. Salazar s verified statement of disinterestedness. Mr. Salazar is hereby notified that a hearing for approval of a proposed sale of the Debtor s assets is scheduled for November 14, 2017 at 9:30 a.m., before the United States Bankruptcy Court, Courtroom #3, Second Floor, Quentin N. Burdick Courthouse, st Avenue North, Suite 201, Fargo, North Dakota Dated: October 27, 2017 Respectfully submitted, Daniel M. McDermott United States Trustee Region 12 /e/ Robert B. Raschke Robert B. Raschke, Assistant U.S. Trustee Office of the U.S. Trustee U.S. Courthouse, Suite South Fourth Street Minneapolis, MN TELE: (612)

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14 Document Page of EXHIBIT B

15 Document Page of Summary of Time by Timekeeper First and Final Fee Application for the Period October 27, 2017 through and including December 6, 2017 PROFESSIONAL AMOUNT OF HOURS HOURLY BILLING RATE AMOUNT OF FEES Luis Salazar 10.8 $ $5, Kevin L. Cabrera 20.1 $ $5, Ali-Marcelle Lee-Sin 13 $ $2, Total: 43.9 $14, Blended Hourly Rate: $323.54

16 Document Page of Ponce de Leon Boulevard, Penthouse Coral Gables, FL (305) BILL TO Luis Salazar as Consumer Privacy Ombudsman for Vanity Shop of Grand Forks, Inc DATE 12/07/2017 TERMS Net 30 DUE DATE 01/06/2018 DATE ACTIVITY QTY RATE AMOUNT 10/27/2017 Pull relevant pleadings and contact Debtor's counsel to coordinate call with Vanity rep to complete CPO report - Kevin Cabrera 10/30/2017 Review Debtor s memo re: PII database and related issues - Luis Salazar 10/30/2017 Conference call with Debtor team re: privacy policies issues, sales - Luis Salazar 10/30/2017 Review privacy policies and all available pages on archive.org for points gathering personal information - Luis Salazar 10/30/2017 Conference call with Debtor to discuss Customer PII and other data privacy questions. - Kevin Cabrera 10/30/2017 Review privacy policy for vanity's website on wayback machine. - Kevin Cabrera 10/31/2017 Address issues concerning initial preparation of Consumer Privacy Ombudsman Report - Ali-Marcelle Lee-Sin 10/31/2017 Review APA agreement between Vanity Brands and Vanity Shops - Kevin Cabrera 0: : : : , : : : : Ponce de Leon Blvd., Penthouse, Coral Gables, Florida (305)

17 Document Page of DATE ACTIVITY QTY RATE AMOUNT 10/31/2017 Assist L. Salazar with preliminary preparation for role as Consumer Privacy Ombudsman - Ali-Marcelle Lee-Sin 11/01/2017 Review pleadings filed in bankruptcy proceeding to assist with drafting Consumer Privacy Ombudsman Report. - Kevin Cabrera 11/02/2017 Review Privacy Policy, s from counsel, and all attachments to s. Research on buyer of Vanity Shops' intellectual property. - Kevin Cabrera 11/02/2017 Call with Vanity Brands, LLC to discuss company background and intention with Vanity Shops intellectual property - Kevin Cabrera 11/02/2017 Draft Vanity Shops Consumer Privacy Ombudsman Report - Kevin Cabrera 11/02/2017 Address issues concerning scheduling conference call with Debtor group - Ali-Marcelle Lee- Sin 11/03/2017 Review and calendar upcoming dates and deadlines in connection with sale hearing and consumer privacy ombudsman report - Ali- Marcelle Lee-Sin 0: : : : : , : : /05/2017 Prepare CPO report - Luis Salazar 1: /06/2017 Meeting with L. Salazar to review Draft CPO Report prior to circulating to debtors, buyer, and US Trustee - Kevin Cabrera 11/06/2017 Continued preparation of CPO report - Luis Salazar 11/06/2017 Prepare, finalize and file Notice of Appearance on behalf of CPO - Ali-Marcelle Lee-Sin 11/06/2017 Review and revise Consumer Privacy Ombudsman Report - Ali- Marcelle Lee-Sin 11/06/2017 Finalize Draft CPO Report to circulate to debtors, buyer, and US Trustee for comments before filing with Court - Kevin Cabrera 0: : , : : : Ponce de Leon Blvd., Penthouse, Coral Gables, Florida (305)

18 Document Page of DATE ACTIVITY QTY RATE AMOUNT 11/06/2017 Review North Dakota Privacy Laws to ensure consumer privacy ombudsman report meets statutory and regulatory requirements. - Kevin Cabrera 11/07/2017 Finalize CPO Report to file with the Court - Kevin Cabrera 3: : /07/2017 Prepare CPO report - Luis Salazar 2: , /07/2017 Review and revise Motion to Appear Telephonically at Sale Hearing; review local rules and procedures in connection with same - Ali-Marcelle Lee-Sin 11/07/2017 Review, revise, finalize and file Consumer Privacy Report - Ali- Marcelle Lee-Sin 11/13/2017 Assist L. Salazar with preparations for hearing on Sale Motion and Consumer Privacy Ombudsman Report scheduled for November 14, Ali-Marcelle Lee-Sin 12/01/2017 Research Charges for the period of 10/26/2017 through 12./6/ /06/2017 Prepare initial draft first and final application for compensation to Consumer Privacy Ombudsman for the period of October 27, 2017 through December 6, 2017; review Court record, local rules and procedures regarding preparation of same; - Ali-Marcelle Lee-Sin 12/06/2017 Prepare Motion to Limit Notice of First and Final Fee Application - Ali-Marcelle Lee-Sin 12/06/2017 review Court record, local rules and procedures regarding preparation of same; - Ali-Marcelle Lee-Sin 0: : : : : : TOTAL DUE $14, Ponce de Leon Blvd., Penthouse, Coral Gables, Florida (305)

19 Document Page of EXHIBIT C

20 Document Page of Summary of Expenses First and Final Fee Application for the Period October 27, 2017 through and including December 6, 2017 EXPENSE CATEGORY AMOUNT Research Charges $33.50 Total Expenses: $33.50

21 Document Page of EXHIBIT D

22 Document Page of In re UNITED STATES BANKRUPTCY COURT DISTRICT OF NORTH DAKOTA Case No.: VANITY SHOP OF GRAND FORKS, INC., Chapter 11 Debtor. / CERTIFICATION IN SUPPORT OF FIRST AND FINAL APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES OF LUIS SALAZAR, ESQ., CONSUMER PRIVACY OMBUDSMAN FOR THE PERIOD OF OCTOBER 27, 2017 THROUGH DECEMBER 6, 2017 LUIS SALAZAR, CONSUMER PRIVACY OMBUDSMAN hereby certifies pursuant to 28 U. S. C. 1746, as follows: 1. I am founder and partner with the law firm of Salazar Law and the Courtappointed Consumer Privacy Ombudsman in this case. 2. I hereby submit this Certification in connection with and in support of the Fee Application requesting the immediate payment by the Debtor of $14, (representing 100% of fees) and reimbursement of $33.50 (representing 100% of expenses) for a total payment of $14, for the period from October 27, 2017 through and including December 6, 2017, pursuant to 330 and 331 of title 11 of the United States Code, Rule 2016 of the Federal Rules of Bankruptcy Procedure. 3. I hereby certify that: a. I have read the Fee Application; b. The fees and disbursements sought are billed at rates and in accordance with practices customarily employed by me and generally accepted by clients; c. To the best of my knowledge, information, and belief, in providing a reimbursable service, I do not make a profit on that service, whether the service is performed in-house or by a third party; and d. To the best of my knowledge, information, and belief, the Fee Application substantially complies with the local rules of this Court.

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