This has to be difficult on a level concerning the children. I suppose you can make this a teachable moment with your girls, especially the one most involved. But to teach what? How adults can muck things up more so than their children? (not intended toward you - you know I think you're a wonderful Mother).
We teach our children to respect the elders. But what does the teacher teach when the elder doesn't deserve respect? And why not?
Not meaning to compound your problem, just thinking about the children.