EDIT: JSFIDDLE: http://jsfiddle.net/h9yzsqfr/
-- Code:
elem.editor.find("div.ui-widget").draggable(
{
    handle:"div.content",
    containment:elem.editor,
    snap:"*",
    start: function(e,ui)
    {
        $(ui.helper).addClass("dragging");
    },
    drag: function(e,ui)
    {
        checkTop(ui);
        if($(ui.helper).parents("div.lo-content").length > 0)
        {
            $(ui.helper).appendTo(elem.editor);
            ui.position = { 'top': e.pageY, 'left': e.pageX };
        }
    },
    stop: function(e,ui)
    {
        oldWidget.saveState($(ui.helper),1);
        setTimeout(function() {
            $(ui.helper).removeClass("dragging");
        }, 300);
    }
});
I have some draggable objects within a container defined by elem.editor; however I have some other draggable objects inside div.lo-content which is also inside elem.editor.
Whenever an object inside div.lo-content is dragged, it should reattach to the elem.editor container which is working fine; however as demonstrated in the following GIF (below), it is not setting the position of the draggable object to where the mouse cursor is.
What is a workaround for this problem?

 
     
     
     
     
    