The hearing was set for Monday, but is now delayed to August 3.
As we reported, lawyers for Katherine Jackson and Debbie Rowe have been hashing out a settlement and we're told an agreement is on the horizon. The discussions, we're told, is amicable and it involves the children -- not money.
Sources say it looks like Debbie Rowe will not object to Katherine getting custody. As for Rowe, she had an agreement with Jackson that was signed several years ago that gave her an undisclosed sum of money spread out over a period of years. That agreement survived Jackson's death and is unaffected by custody issues.
The court ruled Katherine will continue on as legal guardian until the hearing on August 3.