There are times as a Project Manager that you have to rise above the drama that unfolds not just on your project but in the work environment around you. That is part of day to day work life but the Project Manager has to stay focused on the project objectives at hand and by acting that way show an example to your team to follow. This holds true for all those in leadership positions. Dont get involved in the drama that others choose to create.
Take the high ground, no matter how hard, and act with a high level of emotional intelligence – you will make a difference to some, if not all, around you.