I don't think this is a bug of any kind, just quest scripting choices. I was able to get a peaceful resolution once I got the Bardotos & Velaras to meet through conversation choices. But to get them all to the meeting, I had to fail another quest. That quest was the one from the Bardatos to investigate a plot, which was about the vault (forget that quests name). Once I discovered the truth about the vault quest, instead of reporting it to the Bardatos, I set up the meeting, which as I said was successful, but caused the other quest to fail.
Didn't really like failing that other quest, but I preferred to have peace between the familys. There may be other ways, but that worked for me.