New York Supreme Court Judge Ellen Frances Gesmer upheld a court order Tuesday requiring Hermes, 8, and Helena, 6, to fly back to Europe. Rutherford, 46, refused to return them Friday.
"I hope that this decision will end this painful litigation, and that my children will be allowed to live in peace in their own country," she said in her statement.
Her ex-husband, German businessman Daniel Giersch, accused her of kidnapping, filing a writ of habeas corpus in N.Y.C.
The actress arrived at the courthouse alone Tuesday, with her lawyer saying she hoped to protect the children from "the media circus," but that just angered the judge, who had ordered Rutherford, Hermes and Helena all to be present.
"Kelly's failure to deliver the children on Thursday likely bought them a one-way ticket to Monaco," Michael Stutman, head of the family group at Mishcon de Reya New York and a lawyer not involved in the case, tells PEOPLE. "Given Kelly's initial failure to send the children back, showing up without them was probably the nail in her coffin."
Judge Orders Kelly Rutherford's Children Be Returned To Monaco
The children were later brought to the courthouse through a side entrance to say goodbye to their mom and head to the airport with Giersch's mother.
"The kids didn't seem to look like they missed a beat. They were happy, they kissed their mother goodbye, they were happy to see their grandmother, they had smiles on their face. And by the way, they're two beautiful little kids," Giersch's attorney Ira Garr told reporters. "The only complaint they had is they really wanted to get back to playing; it was boring in the courtroom."
Eugene Gologursky / Getty
"It was done very civilly," Garr added. "Ms. Rutherford said, 'Oh, you're going to see Papa, and you're going to go with Oma.' And the kids seemed fine."
Rutherford did not speak to reporters after the hearing, slipping out through a side entrance. Neither she nor her attorney could be immediately reached for comment.
"It's really unfortunate that it came to this, and that Hermes and Helena were forced to say goodbye to their mother in a courthouse, rather than having a natural transition," Robert Wallack, a lawyer who represented Rutherford in federal court last year, tells PEOPLE. "However, today's proceedings played out exactly as expected, and it now appears the next chapter of this story will be written in Monaco."
Rutherford and Giersch, 41, have been caught up in a bitter custody battle since she filed for divorce in 2008. A California judge ordered the children to live with their dad in Monaco temporarily in 2012 because his visa had been revoked, and they spend summers with their mom.
So what's next? There's a Sept. 3 hearing in Monaco concerning custodial rights – "rights to make decisions about their medical treatment, et cetera," Garr explained – and though his lawyers say Giersch is not "looking to punish" his ex-wife for trying to keep the kids with her, she could face restricted access to the children.
"After this episode, we will be speaking with our client and his attorney in Monaco and maybe considering taking different measures about future visits to the United States, how the passports are held or whether the visits need to be supervised, because we don't want a reoccurrence of this a year from now," Garr said.
COP / BuzzFoto / FilmMagic
Both California and New York family courts relinquished jurisdiction in recent weeks, but there has still been no appeal on the substantive issues of whether it's in the best interest of the children for them to stay in Monaco or move back to the United States.
"It was a risky move for Kelly, but I must admit that I'm totally perplexed by the totality of the legal rulings," Dan Abrams, ABC's media analyst who has championed Rutherford's cause, tells PEOPLE. "A California court furious at Daniel Giersch's apparent disregard for its ruling orders the kids back to the United States and grants Kelly custody. Then somehow that same court determines that it actually doesn't have jurisdiction to enforce its own ruling. A New York court (and federal court) also finds it lacks jurisdiction.
"Then, Kelly announces that since she can not get any court to enforce the terms of the California ruling, she isn't sending the kids back and suddenly another New York judge determines that it actually does have jurisdiction to send Kelly's kids back to Monaco? So that she can abide by the terms of a Monaco ruling? How is it possible that no U.S. court can enforce the specific terms and requirements of a U.S. ruling but a U.S. court can enforce the terms of one from Monaco? I really don't get it."