James and Sheila continued their sessions while Eric confided in Lauren that Sheila no longer made him happy. Sheila threatened Lauren not to say anything about her past, but she no longer had a real hold on Lauren. Sheila tried to drown Lauren in the Jacuzzi, but Lauren escaped. She told James all about Sheila´s past. Lauren was sure James would tell Eric all about it and went back to Genoa City. But before James had the chance to tell Eric anything, Sheila and Mike kidnapped him and held him prisoner in the dungeon under Eric & Sheila´s house. Sheila made James call Eric and Stephanie to tell them he was leaving town. Eric moved out of the house and fired Sheila. James tried to get free and Stephanie suspected Sheila had something to do with James´s disappearance. When Sheila came at him with a knife, James overpowered her and managed to lock Sheila into the dungeon. James later returned with the police, but Sheila had escaped.
Lauren returned to Los Angeles and Stephanie convinced her to tell Eric all about Sheila. Eric got to hear all sordid things about his “dear” wife. Sheila called them to gather at the mansion without police. James, Lauren, Brooke, Ridge, Eric and Stephanie. Sheila took out a gun and held them at gunpoint and threatened to kill Stephanie. But instead of shooting Stephanie, Sheila took out a poison and drank it herself. She appeared to die. But the Forresters later learned she had survived and was currently in a hospital for the criminally insane.