Maggie's news assignment on vineyard worker's lifestyles becomes a personal concern to the Giobertis when Maggie's interviews reveal that an extortionist is terrifying Falcon Crest employees. Puzzled as to why undocumented workers suddenly stop working for him, Chase urges Maggie to find out the reason through her interviews. When Chase learns that a man is blackmailing the vineyard workers with threats of deportation, he, despite Angela's warnings against becoming involved, manages to rout the extortionist. When Emma discovers that she is pregnant, Lance realizes that the last thing he needs is another heir competing for the Falcon Crest fortune. Consequently, Emma tumbles down a flight of stairs and has a miscarriage.

Angela resists Chase's claims to half ownership of Falcon Crest. Lance, already bitter over the prospect of sharing his inheritance with Melissa, gladly accepts the assignment of keeping Chase off the vineyard property. Richard Channing, illegitimate son of Angela's late husband, prepares to take control of The Globe as the new chairman of the board, while Angela looks for a way to block him. The newspaper is only a small part of the vast portfolio called ""The Company,"" held by Henri Denault, Richard's mentor and stepfather. Adopted at a young age, the desire to finally learn his mother's identity has motivated Richard to make the move to California and take over The Globe. When Cole shows up at the Agretti's demanding that Melissa acknowledge that she is carrying Cole's child and not Lance's, Carlo punches him in the face. After Gus dies in a gas explosion, Chase threatens Angela with an affidavit accusing her of complicity in Gus's death. He then forces Angela to agree in sharing the

Against Maggie's wishes, Cole moves in with his new lover, Katherine Demery. Richard finds out and plasters The Globe with clandestine photographs of Cole and Katherine kissing. Jacqueline Perrault, Chase's mother, arrives from Zurich for a surprise visit and gives Chase money for Cole's legal defense, but Richard uses his contacts in Zurich to force Jacqueline to leave town. Angela buys up expensive stock in The Globe and continues tracking Emma to get her proxy. Lori demands that Lance come out in the open about their relationship. Lance is defiant when Melissa confronts him about his late night trysts. After a sudden complication in Melissa's pregnancy confines her to bed, however, Angela pressures Lance to spend more time with his wife.

Richard schemes to buy a piece of county property earmarked for a park, on which he plans to build a memorial to Douglas Channing on one small part and plant a vineyard on the rest. While Chase vehemently opposes the plan, Richard plants a bomb in Nick's truck and successfully intimidates Nick to vote his way at the board of supervisors meeting. Leaving her prescribed bed rest in order to win Cole back from Katherine Demery, Melissa collapses and is taken to the hospital, where she delivers an unhealthy, premature baby, whom she names Joseph Angelo Cumson, after Lance's great-great-grandfather. After Cole moves out of Katherine Demery's house, he moves back into his parents' house.

Doctors give Melissa's premature baby, Joseph, who suffers from a host of health problems, a twenty percent chance of survival. Richard uses a lucrative job offer to entice Tony into securing Julia's agreement to sell off her interests in Falcon Crest and The New Globe. However, the plan backfires and Julia is devastated; Tony realizes Richard's job offer wasn't real. When Cole goes on the run to avoid facing trial for the murder of Carlo Agretti, Melissa agrees to a second autopsy of her father's body hoping it will help clear Cole. The autopsy reveals that the killer must have been right-handed, whereas Cole is left-handed, and the charges are therefore dropped.

Melissa is grateful when Richard flies a neo-natal specialist in from Europe to keep her baby alive. Maggie travels to Los Angeles to meet with producer Darryl Clayton about her screenplay. After Darryl turns the script down, Angela meets Darryl in secret and agrees to invest in the film if he will keep Maggie occupied in Los Angeles. As a romantic relationship develops between Vickie Gioberti and her father's associate, Nick Hogan, Vickie finds out from Cole that Nick is married. Chase discovers that Angela is using all of Falcon Crest's investment funds to buy up stock in The New Globe. After Chase confides with Nick about his war with Angela and her attempt to take over the newspaper, Richard soon finds out and confronts Angela. As Joseph's condition improves, Cole vows to be a loving father. Richard puts a down payment on a house in Tuscany Valley.