What must i do with this blackmail situation?

Ok so my sister is blackmailed by a boy who demands a pornographic picture of herself by tomorrow and if she doesn't, he will spread a terrible rumor at school. I am 3 years older than my sister and I have texted this guy and threatened him that I'm going to beat him up when I get to him. (I am 2 years older than him) and I am a minor and so are they. (I'm 17). I'm not going to allow this to happen to my sister. My parents have been gone for almost a week now and coming back on sunday afternoon, should I tell them this and possibly sue, or beat him up?