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Paige leaves Greg because she wants a baby and he doesn't. Mack and Karen celebrate their wedding anniversary with a party at Gary and Val's. Abby prepares to move out of the cul-de-sac to a house in Malibu, but the IRS seize all of her assets due to unpaid taxes so she moves in with Karen. Mack begins a class-action lawsuit against Greg on behalf of his former employees, but the case hinges on a document that is missing. Val's latest book "Hostage" is to be turned into a film and the studio team her up with a scriptwriter named Clay McKinney. Meg tries to find out who her biological father is. Kate reappears in Knots Landing with a four-year-old daughter named Molly and tells Gary he is the father. Anne also returns and goes to stay with Greg. Abby tells Greg that she can get him the missing document if he pays her $1 million so she can pay the IRS her back taxes. He agrees so she gets a job working with Gary and Karen at their new construction company where the document is stored. Clay gets drunk and makes advances towards Val. They argue and she pushes him away and leaves his home. The following morning, Clay is found dead in his pool. The police find one of Val's earrings next to Clay's pool, but Val denies it is hers. Greg agrees to settle the lawsuit with Mack and no longer needs the document, but Abby has already arranged for Robert Simons, an old boyfriend, to steal the document. However, he is interrupted by a security guard whom he accidentally kills so he sets fire to the warehouse to cover his tracks. Mack is going through a mid-life crisis and moves out of the house which upsets Karen. Meg finds out Greg is her natural father and goes to visit him where he plays her the tape recording her mother Laura made for her before she died. Abby, still desperate for money, snoops around in Greg's business affairs for something she can use against him. Instead, he offers her a job overseeing a business operation in Thailand. Val finally tells the police what happened at Clay's house, and they accept his death was accidental. Karen and Mack reconcile, and Karen's son Michael returns home with his fiancée to tell Karen she is going to be a grandmother. At the same time, Abby's son Brian announces that he and Kate are also expecting a baby of their own so Abby is to be a grandmother too.