Michael left without Ali, 16, and Lilo went on a tweeting rampage, airing out assorted dirty laundry.
The starlet's father now tells TMZ that he is willing to back off of trying to get her placed under a conservatorship if she and Ali agree to sit down and talk with him -- no media, no lawyers, and no Dina Lohan.
If they agree to do this, he says he won't go to the L.A. County Department of Children and Family Services to have his youngest removed from Lindsay's supervision. Michael believes that Ali is in danger with her.
Lindsay is also being accused of stealing a $35,000 Rolex watch. The watch reportedly belongs to one of Lohan's friends who left it at her house earlier this year -- and hasn't seen it since. When questioned by law enforcement, the actress denied any involvement.