Debbie Rowe, the mother of Prince Michael, 12, and Paris, 11, is their legal parent and can gain custody of them if she chooses, according to Rowe's former attorney, Iris Finsilver.
Prince Michael, Paris and Jackson's third child, Blanket, 7, whose mother has not been identified, have been in the care of Jackson's mother Katherine since the entertainer died Thursday after a cardiac arrest. "The kids are very upset, but they are fine," Jackson's manager, Frank DiLeo, tells PEOPLE.
During the custody fight between Rowe and Jackson in 2005, Rowe sought to give up her parental rights, and lauded Michael as a good father. Retired Judge Stephen Lachs, who presided over the hearing, at first agreed to terminate them, but then Lachs changed his mind and returned the rights to her.
"She lost them, and then she got them back," Finsilver says. Finsilver said she spoke to Rowe on Thursday but she cannot say what Rowe plans to do. "She was inconsolable."
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"Katherine is the logical choice – she has all the grandkids and nieces around her but it will be up to the courts," Oxman tells PEOPLE. "I wouldn't be surprised if there are more proceedings regarding the children."
Stay tuned to PEOPLE.com for more on Jackson's cause of death ...