Lindsay Lohan

Lindsay's Parents Working Toward Divorce Resolution

By Diane Herbst

08/10/2007 at 01:45 PM EDT

Michael and Dina Lohan – parents of troubled star Lindsay Lohan – agreed on Friday to resolve their differences and come to a satisfactory conclusion to their protracted divorce without going to trial, the estranged couple decided in a Long Island, N.Y., courtroom.

"I'm happy we're working on an agreement," said Dina Lohan, when asked how she felt about the progress.

The two have a week to reach an agreement before meeting in court again. If no agreement is met, then the case will proceed to trail, said Judge Robert Ross.

After the hearing Michael Lohan, who has not been allowed to see his three youngest children with Dina, told PEOPLE: "Dina and I are working everything out, and we will have an agreement signed by next Friday. I hope to be reunited with my children very shortly and be a part of their lives."

Prior to the proceedings, Dina was asked about her daughter, Lindsay, 21, who has been out of sight from the media since her second arrest for DUI, which took place over the July Fourth weekend.

"I speak to her all the time," Dina told PEOPLE. "She's doing wonderful." She had no comment on her daughter's next move.

The Lohans agreed to a separation in 2005. About two months ago, Dina requested that the separation be finalized with a divorce. The separation agreement called for Dina to pay Michael alimony and money from shared property, which she has not done, according to his attorney John DiMascio, Jr., who would not disclose the amounts owed.

Following the hearing, Michael disputed recent claims by Lindsay's former bodyguard, Tony Almeida, that Michael once pushed Lindsay against a car on the Long Island Expressway and called her a slut.

He also denied Almeida's claims that he and Dina allowed their famous daughter to drink during her sweet 16 party and and share a hotel room with then boyfriend Aaron Carter.