Durazo Communications closes shop

LOS ANGELES: Following the June 5 dismissal of a contractual fraud lawsuit filed by former contractor GMMB, Durazo Communications has officially shuttered its doors.

LOS ANGELES: Following the June 5 dismissal of a contractual fraud lawsuit filed by former contractor GMMB, Durazo Communications has officially shuttered its doors.

"The agency had been losing money, and the lawsuit just brought the financial situation to a head," said Dan Durazo, president of the 15-year, Los Angeles-based firm focusing on Hispanic PR. The suit, filed by Omnicom-owned advertising and PR agency GMMB, alleged that Durazo Communications misappropriated $2.8 million of the $4 million it was paid to place Spanish-language commercials on behalf of the First 5 California Children and Families Commission on TV stations throughout the state.

According to documents filed in LA County State Superior Court, GMMB withdrew its suit after Durazo Communications transferred $2.5 million into a trust established to pay outstanding vendor invoices and refunds due to the state. In addition, GMMB contributed $231,000 owed to Durazo Communications, and notified government agencies that "the media has been paid in full."

Durazo said he closed up shop on April 28, laying off all six remaining employees. Now that the lawsuit has been dismissed, he said, he'll "take the summer off to regroup" and consider "the next chapter of my life … at least we ended on an up instead of a down note."

Durazo Communications' founder and Dan's father Ray Durazo left the firm last summer to start a new agency, Durazo Marketing Group. While noting he has not been involved with his former business for months, Ray acknowledged that "on a personal level," he was "somewhat saddened" by the news of its demise.

"There's a twinge of sadness you feel when you see something you built and worked very hard at go away," he said. "But doors close, and others open."

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