10/02/2006 at 01:00 AM EDT
The night before she announced she was filing for legal separation with the intent to divorce, Whitney Houston made an equally meaningful statement by stepping out. After attending the Sept. 12 Society of Singers Ella Awards as a guest of longtime mentor Clive Davis, the singer turned up at Crustacean Beverly Hills—coincidentally, two hours after her soon-to-be-ex, Bobby Brown, left. "She looked great and seemed to want to enjoy the jazz band," says an observer. Adds a source who saw her at the awards: "She either played [the split] off really well, or she's in a better place now that this divorce is under way."
As the lyrics to one of Houston's hits goes, "It's not right/But it's okay/I'm gonna make it anyway." Having left the Atlanta home she and Brown, 39, shared during their tumultuous 14-year marriage, Houston, 43, is now living in Los Angeles with the couple's daughter, 13-year-old Bobbi Kristina, and working on her first new album since 2003. "I'm really saddened by the whole situation," Brown, who also has been living in L.A. and is recording his own solo album, tells PEOPLE. Since the announcement, he adds, "we haven't talked."
Houston, meanwhile, has remained mum on the split, but those in her inner circle say she is more focused than ever on work. "We're continuing to select material for her album," says Clive Davis, the chairman of BMG North America, who first signed Houston in 1983. "We're all excited; everyone in our industry knows that she and Aretha [Franklin] are the best singers in the world." J Records exec Larry Jackson, who is working with her, reports that she's been "glowing" in recent days: "You can see it by looking at her. Her spirit is right."
So what made the couple—whose roller-coaster romance (see box) seemed to defy derailment—finally call it quits? A relative of Brown's says the problems started last fall. "The relationship just spiraled out of control," says the relative. "They fought like cats and dogs. They would fight about what to eat for dinner, about who wasn't cleaning out the dishwasher. Stupid things. But they were always yelling."
Then things took a more serious turn in March when Brown's sister Tina told The National Enquirer that Houston was a drug addict. (Although Houston has never publicly addressed the Enquirer story, she most recently underwent rehab in April 2005; Brown did the same in 2000.)
Another source says the "final straws" involved recent tabloid reports that Brown, the target of persistent rumors of infidelity, has been carrying on a longtime affair with Karrine Steffans, who claimed Brown as one of her conquests in her 2005 kiss-and-tell book Confessions of a Video Vixen. (Steffans told New York's Daily News last week that she is not a "homewrecker" and denied having anything to do with the breakup.) "I am not going to pretend that Bobby was a perfect husband—he's not," says the Brown relative. "But it's not like he just ran around with anyone. The marriage was broken."
In her petition for separation, Houston asked for custody of Bobbi Kristina and requested that Brown, who is set to perform several upcoming shows in New York City, be allowed visitation rights. Victor "GV" Dugue, who is working on Brown's upcoming album, says that given the exes' equally outsized, "crazy" personalities, the relationship has always been volatile and that the current split may prove to be just another bump in the long and winding road. "Both of them are very emotional.... They're arguing one second; the next minute, they're laughing again," says Dugue. As Brown himself told PEOPLE in January, "They say opposites attract, but we're not opposites. We're one person." Adds the Brown relative: "Right now they're both angry, but there's a thin line between love and hate. They're going to always have a place in each other's lives."
For continuous news coverage of the Whitney and Bobby breakup, go to people.com/whitney