First of all, don't panic. I know it can be scary and nerve wracking to hear about "legal counsel", but try not to let it freak you out. Unfortunately, you're just going to have to wait and see what it is that they do in order to see what your response should be. They may not do anything so it's too early at this point to hire a lawyer.

In terms of the other parent, you don't have to give out any information. Just tell her that so and so won't be coming any more and that his parents decided that something else would fit them better.

Good luck.