When Michael learned that his ex-girlfriend Hillary was out of town, he broke into her apartment and smashed a hole in the wall that was adjacent to Chris's apartment. Nina arrived unexpectedly and a gun-toting Michael bound and gagged her. When Chris arrived home, Michael tried to rape her. Fortunately, Chris was rescued by Paul, who shot and wounded Michael. Later, Chris visited Michael in jail and was startled to find him speaking incoherently. Chris accused Michael of feigning insanity to escape a long prison sentence.

Victor Newman agreed to drop rape charges against Ryan because he suspected that Ryan was still involved with Nina. Victor also tried to enlist Nikki's help in voiding Victoria and Ryan's marriage. Learning of Victor's plan, Victoria lashed out at him and demanded that her father stay out of her life. Victoria sought therapy for her inability to make love to Ryan. Deciding that their situation was hopeless, Victoria separated from Ryan and moved in with Nikki. Soon after, Ryan presented Victoria with divorce papers and started sharing Nina's apartment. Victoria took her mind off Ryan by turning her interest to Cole Howard, a man doing odd jobs at the Newman ranch.

Sheila Carter secretly resurfaced in Genoa City, where she hid in Lauren's closet and took incriminating photos of Lauren affair with Brad Carlton. Returning to Los Angeles, Sheila developed the photos and cut them into tiny pieces, which she sent to Lauren as a puzzle, along with a note stating that someone from Lauren's past was about to re-emerge. At first, Lauren assumed Traci was responsible for the puzzle. When a presumed-dead Sheila showed up on Lauren's doorstep, claiming that she wanted to resolve their differences, Lauren was shocked.

Lauren quickly deduced that Sheila was the secret blackmailer. In anger, she also jumped to the conclusion that Molly Carter was working on this with her daughter. Lauren accepted that her marriage to Scott Grainger was hopeless and announced that she wanted a divorce. Soon after, Scott learned that he was suffering from a terminal illness. When Sheila heard of Scott's dire condition, she went to him and said she still loved him. Not long after, Scott died while on a vacation with Lauren in Catalina.

While Victor and Nikki were engaged in a heated confrontation, Nikki accidentally fell down the steps and suffered a miscarriage. Jack was grief-stricken over the miscarriage of his baby. Realizing that Nikki was still confused about who she loved, Jack moved out, hoping that the separation would give her a chance to finally resolve things. However, Jack was livid when he discovered that an argument between Nikki and Victor had led to Nikki's fall down the stairs. Jack confronted Victor and they began fighting. Soon after, Victor was blasted by Nikki, Ashley and Victoria, who all resented the control he tried to exert in their lives. And, on another front, Victor had to warn his former secretary, Eve Howard, not to make false claims about his being the father of her son, Cole.

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