February 01, 2006 01:00 PM

Things have gone from bad to worse for Charlie Sheen and Denise Richards, PEOPLE reports in its upcoming issue.

On Jan. 4, after talk of reconciling, they instead requested that their divorce proceed with a private arbitrator. Now the two are no longer on speaking terms. “It’s gotten very ugly,” someone close to Richards, tells PEOPLE. “They aren t talking to each other at all.”

Sources familiar with the couple say the relationship deteriorated rapidly and there is no hope of reconciliation. “His only concern is for the kids,” says a friend of Sheen’s.

As for the status of their split, Sheen and Richards are trying to figure out custody arrangements for their two daughters, Sam, almost 2, and Lola, 8 months. According to their initial court petitions, Richards is seeking sole custody but Sheen wants joint custody.

“This has been really hard on Denise,” says a Richards pal. “But she’s staying strong for her daughters’ sake.”

Reps for Sheen and Richards said they do not comment on their clients personal lives. The actress filed for divorce last March, but in the months that followed the two were again seen together – with Richards sometimes wearing her wedding ring. The couple even took a Caribbean vacation together less than a month before the arbitrator took over their case.

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