UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, DC 20549


                            FORM 8-K


                     CURRENT REPORT PURSUANT
                  TO SECTION 13 OR 15(D) OF THE
                 SECURITIES EXCHANGE ACT OF 1934


   Date  of  report (Date of earliest event reported):   February
20, 2006 (February 7, 2006)

                        Innovo Group Inc.
     (Exact Name of Registrant as Specified in Its Charter)

                            Delaware
         (State or Other Jurisdiction of Incorporation)

            0-18926                        11-2928178
    (Commission File Number)   (IRS Employer Identification No.)


5804 East Slauson Avenue, Commerce, California       90040
(Address of Principal Executive Offices)           (Zip Code)

                         (323) 725-5516
      (Registrant's Telephone Number, Including Area Code)

                               N/A
  (Former Name or Former Address, if Changed Since Last Report)

   Check  the  appropriate box below if the Form  8-K  filing  is
intended to simultaneously satisfy the filing obligation  of  the
registrant  under  any of the following provisions  (see  General
Instruction A.2. below):

 [  ] Written  communications pursuant  to  Rule  425  under  the
Securities Act (17 CFR 230.425)

 [  ] Soliciting  material  pursuant to  Rule  14a-12  under  the
Exchange Act (17 CFR 240.14a-12)

 [  ] Pre-commencement communications pursuant to  Rule  14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))

 [  ] Pre-commencement communications pursuant to  Rule  13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))



ITEM 8.01 Other Information

     As  previously disclosed in our Form 10-Q for the  quarterly
period  ending August 28, 2004, on September 14, 2004, an  action
was  filed  in the United States District Court for  the  Central
District of California alleging that certain transactions of  our
common  stock  during September and October 2003 and  March  2004
between  Innovo Group Inc ("Innovo"). on the one hand and  Azteca
Production  International, Inc., SHD Investments, LLC, Integrated
Apparel  Resources,  LLC,  Commerce Investment  Group,  LLC,  the
Stephan Avner Guez Trust and the Griffin James Aron Guez Trust on
the  other hand violated Section 16(b) of the Securities Exchange
Act  of  1934  (the  "Complaint").  We were named  as  a  nominal
defendant  in  the Complaint.  On January 31, 2005, Azteca,  SHD,
Integrated,  Commerce, the Trusts and other  defendants  filed  a
motion  to  dismiss  the Complaint.  The Motion  to  Dismiss  was
granted  without  leave to amend on April 18, 2005.   The  Innovo
shareholder  who  brought the action appealed from  the  District
Court's ruling.

     On  February  7,  2006,  the Innovo  shareholder  agreed  to
dismiss  her  appeal  with  prejudice  in  exchange  for  a  cash
settlement from Azteca, SHD, Integrated, Commerce and the Trusts.
We did not have to contribute to any part of the cash settlement.
We expect the dismissal to become effective on March 20, 2006.



                           SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                              INNOVO GROUP INC.
                              (Registrant)

Date:  February 20, 2006           By:  /s/ Marc Crossman
                                   Marc Crossman
                                   Interim Chief Executive
                                   Officer, President, Chief
                                   Financial Officer and Director
                                   (Principal Executive Officer
                                   and Principal Financial
                                   Officer)