Santa Monica Firm Settles Suit Over Ad Campaign for Preschool

A Santa Monica advertising firm that produced a tax-funded $23-million ad program touting the benefits of preschool settled a suit after one of its subcontractors made $2.5 million in payments, the firms have announced.

GMMB Inc. alleged in a suit filed in Los Angeles County Superior Court in April that the subcontractor, Durazo Communications, failed to pay some television stations that aired the commercials, which were funded by the First 5 California Children and Families Commission.

But in a settlement released Friday, the firms agreed that Durazo has since made $2.5 million in payments, ending what Durazo termed an “unfortunate misunderstanding.”

Daniel Durazo, the subcontractor’s owner, said he is “working with creditors” to resolve remaining payment issues.

The suit attracted attention when Hector Ramirez, the commission’s chairman, called on the Los Angeles Police Department and the state Bureau of Audits to find out what became of the money.

As part of the settlement, GMMB sent a letter to the Los Angeles district attorney’s office saying the matter had been resolved.