Jackson Pal Kathy Hilton: Mom Katherine Is the Family 'Rock'

Kathy Hilton, Paris's mom, was devastated by the recent loss of her lifelong "special friend" Michael Jackson.

"I have never lost anybody that I went to school with that I was close to in a friendship [that lasted] all these years," she told PEOPLE about the singer at the Southampton Hospital 51st Annual Summer Party in Southampton, N.Y., on Saturday night.

But Hilton, who first met Jackson when they were teens, believes that Michael's mother Katherine – who is in the process of being granted full custody of the singer's three children, Prince Michael I, 12, Paris, 11, and Prince Michael II (a.k.a. "Blanket"), 7 – will be a positive guardian for the kids.

"I adore Mrs. Jackson. Katherine is the rock," said Hilton. "It is like Camp Jackson, all of those kids. All the aunts, the uncles, the children come there. She plays Scrabble with them. She loves it. I think that's what keeps her really young." Asked if Katherine has the energy to watch over her three grandkids, Hilton responded: "Ohhh, she's got the energy."

Michael as a Father

Hilton, who lived next to Michael Jackson at the Bel-Air Hotel for several months last year, has fond memories of her former neighbor. "He was so much more normal than people know. He really was. He loved to giggle and have fun. I spent time with him, had dinners," she said. "He was the best father. He devoted the last 14 years to being with his children. He was a wonderful, kind, thoughtful, caring person. He would be there for people and he was so generous with his time and money."

Though Hilton wasn't aware of any of the insomnia issues that reportedly plagued and ultimately may have contributed to his use of the drug Propofol, she remembers the singer up early frolicking with his children at the hotel. "There was a big garden there. [My husband Rick] would leave for work at 7:30 a.m., and Michael would be out playing with his children. I am in such pain for his family, for these kids."

And there are certain things Hilton says she'll never forget about Jackson. "People think that they knew him and they didn't," she said. "His generosity, sense of humor, the mischievous giggle, the laugh."

People / Thanks so much Sheril Snider!