Settlement Accepted in Restaurant Deal Suit

Esco Development Co., a Chino Hills construction contractor, said Thursday that it had agreed to a $425,000 settlement in a lawsuit it brought against Galardi Group, parent company of Wienerschnitzel restaurant chain, and four local lawyers.

The dispute centered on a now-defunct company called Back Bay Enterprises Inc., which incorporated in 1986 for the purpose of building five Weldon’s restaurants that would operate under a franchise agreement with the Galardi Group in Newport Beach. Galardi, headed by founder John Galardi, currently operates a Weldon’s in Costa Mesa.

Esco, a partnership of Elmer and Scott Child that until recently was based in Santa Ana, invested $500,000 for a 25% stake in Back Bay, and later loaned the company an additional $150,000. But Back Bay had not succeeded in opening any Weldon’s restaurants when it ran out of funds in 1987.

Esco filed a lawsuit in 1988 alleging that Galardi and a number of other defendants--including an attorney for the Childs who introduced them to the project--had fraudulently misrepresented the company’s business prospects and committed a number of other wrongful acts that caused the Childs to lose their investment.

William S. O’Hare, a Newport Beach attorney representing Esco, said that Galardi Group had agreed to pay $150,000 as part of a settlement and that four Orange County attorneys involved with Back Bay--Daniel R. Wildish, Thomas Saltarreli, Robert Boehmer, and Richard King--would collectively pay $275,000.

An Orange County Superior Court commissioner is expected to approve the settlement, which involves no admission of wrongdoing by the defendants, sometime this week, O’Hare added.

An official at Galardi said he had not seen the settlement and could not comment.