He's "spending every free moment with his children," says his friend, "taking them to school and doing the things they love to do, so this doesn't disrupt their lives too much."
Their stepmom, Sandra Bullock, moved out of the family home on March 15 after allegations of infidelity were made against James.
"He would certainly love for this somehow to go away and that somehow things can be rectified and put back together," the friend says. "The one thing that's most important to him in the whole wide world is that his family comes back together. He will do whatever that takes.
James, 40, the West Coast Choppers motorcycle king, has daughters Chandler, 15, and Sunny, 6, and son Jesse Jr., 12, from two previous marriages. Bullock, 45, has long spoken of her deep love for his kids, whom she treats as her own.
The James friend says of the newly minted Oscar winner: "You're talking about one of the most beautiful, talented women in the world, just an absolute wonderful human being, and there's a great loss to him and his children."