It is horrible that your granddaughter is being bullied at school.  But now that the bullies' parents are involved, it is even worse.  Keep encouraging your granddaughter and her parents to stay on top of this and not to back down.  Have them keep a detailed account of everything that happens in and out of school with her peers as well as their parents.  Just to keep the emotions out of it, just stick to the facts.  

If it happened at school, ask the school for a copy of any documentation on the incident.  It might be a letter to the bullies' parents, memo to her teacher, or just a record that the incident happened.  If it happened outside of school, call the police so they can take a statement.  Bullying has gotten out of control and you need to have some kind of a paper trail if you need to make a case.  Otherwise it comes down to a her said, they said situation, making it more difficult to sort out what is going on.

Keep telling your granddaughter that you love her.  What is happening is not her fault.  She needs to know that someone is in her corner fighting for her.

Education.com has some great resources that might provide you with additional information.  Good luck.