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  		UNITED STATES<BR>
  	SECURITIES AND EXCHANGE COMMISSION
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  	WASHINGTON, D.C. 20549
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  	FORM 8-K
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  	CURRENT REPORT
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  	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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  	Date of Report (Date of Earliest Event Reported):
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  	&nbsp;
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  	July 3, 2007
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  	Innovo Group Inc.
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  <BR>__________________________________________<BR>
  	(Exact name of registrant as specified in its charter)
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  	Delaware
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  	0-18926
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  	11-2928178
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  _____________________<BR>
  	(State or other jurisdiction
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  _____________<BR>
  	(Commission
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  ______________<BR>
  	(I.R.S. Employer
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  	of incorporation)
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  	File Number)
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  	Identification No.)
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  	5901 S Eastern Ave, Commerce, California
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  	90040
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  _________________________________<BR>
  	(Address of principal executive offices)
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  	&nbsp;
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  ___________<BR>
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  	Registrant&#146;s telephone number, including area code:
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  	323-837-3700
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  	Not Applicable
  <BR>______________________________________________<BR>
  	Former name or former address, if changed since last report
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  	&nbsp;
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  <!-- CoverPageRegistrant END --><P><FONT SIZE="2">
  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:</FONT>
  </P>
  <P><FONT SIZE="2">
  [&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
  [&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
  [&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
  [&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
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  	Item 1.01 Entry into a Material Definitive Agreement.
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  As previously disclosed on a Current Report on Form 8-K filed with the SEC on February 7, 2007, on February 1, 2007, Innovo Group Inc.&#x2019;s (the "Company") subsidiary, Joe&#x2019;s Jeans Inc., ("JJI") entered into a mutual dissolution agreement with Beyond Blue, Inc. to end its Master Distribution Agreement ("MDA") for the international distribution of its Joe&#x2019;s&#174; and Joe&#x2019;s Jeans&#x2122; branded products (the "Dissolution Agreement").  As part of the Dissolution Agreement, the parties reserved certain rights relating to certain financial and other obligations between the parties pursuant to the MDA.  <br><br>On May 24, 2007, BBI filed a complaint in Los Angeles County Superior Court in the State of California (the "Litigation") asserting, among other things, certain of its reserved rights under both the Dissolution Agreement and MDA.<br><br>In connection with the Dissolution Agreement, on May 25, 2007, JJI filed an arbitration claim with the American Arbitration Association (the "Arbitration") asserting, among other things, certain of its reserved rights under both the Dissolution Agreement and MDA.<br><br>On July 3, 2007, the parties executed a definitive Settlement Agreement and Release ("Settlement"), a copy of which is attached hereto as Exhibit 10.1 and incorporated herein.  On July 9, 2007, the parties issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein.<br><br>Under the terms of the Settlement, the parties have agreed to dismiss both the Arbitration and Litigation with prejudice and all related claims.  Additionally, BBI has agreed to pay $200,000 to JJI, and JJI has agreed to certain restrictions relating to its international business for a period of five years.  JJI has also agreed to fulfill certain purchase orders placed by BBI through October 31, 2007, and has agreed to honor and/or reaffirm the terms and conditions of certain written sub-distribution agreements, including certain current distributors of JJI.  BBI has also agreed to cease marketing, distributing or selling products or items bearing the Joe&#x2019;s Jeans&#x2122; and related trademarks, with the exception of fulfilling certain pre-existing obligations relating to purchase orders in certain territories through October 31, 2007.  In addition, each of the parties entered into a customary mutual release of the other party and customary indemnification provisions.  <br><br>The preceding description of the Settlement is a summary of the material terms of the agreement, does not purport to be complete, and is qualified in its entirety by the copy of the agreement which is filed herewith as Exhibit 10.1.  Exhibit 10.1 is incorporated herein by reference.  <br>
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  	Item 9.01 Financial Statements and Exhibits.
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  (d)	Exhibits.<br><br>Exhibit <br>Number		Description<br><br>10.1	        Settlement Agreement and Release*<br><br>99.1		Press Release dated July 9, 2007<br><br>*  The Company has omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and shall furnish supplementally to the Commission copies of any of the omitted schedules and exhibits upon request.<br>
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  	SIGNATURES
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  	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 hereunto duly authorized.
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  	Innovo Group Inc.
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  	&nbsp;&nbsp;
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  <I>
  	July 9, 2007
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  	By:
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  <I>
  	/s/ Marc Crossman
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  <I>
  	Name: Marc Crossman
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  <I>
  	Title: Chief Executive Officer (Principal Executive Officer), President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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  	Exhibit&nbsp;Index
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  	Exhibit No.
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  	Description
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  	10.1
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  	&nbsp;
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  Settlement Agreement dated July 3, 2007
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  	99.1
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  	&nbsp;
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  Press Release dated July 9, 2007
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metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "htm_21334.htm", "description": "LIVE FILING", "secsgml_size_bytes": 13152}]
metadata_filer: {"company-data": {"conformed-name": "INNOVO GROUP INC", "cik": "0000844143", "assigned-sic": "2390", "irs-number": "112928178", "state-of-incorporation": "DE", "fiscal-year-end": "1130"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-18926", "film-number": "07969639"}, "business-address": {"street1": "5901 SOUTH EASTERN AVENUE", "street2": "-", "city": "COMMERCE", "state": "CA", "zip": "90040", "phone": "323-8373700"}, "mail-address": {"street1": "5901 SOUTH EASTERN AVENUE", "street2": "-", "city": "COMMERCE", "state": "CA", "zip": "90040"}, "former-company": {"former-conformed-name": "ELORAC CORP", "date-changed": "19901009"}}
text: Innovo Group Inc. (Form: 8-K)
  UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 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):
  July 3, 2007
  Innovo Group Inc.
  __________________________________________
  (Exact name of registrant as specified in its charter)
  Delaware
  0-18926
  11-2928178
  _____________________
  (State or other jurisdiction
  _____________
  (Commission
  ______________
  (I.R.S. Employer
  of incorporation)
  File Number)
  Identification No.)
  5901 S Eastern Ave, Commerce, California
  90040
  _________________________________
  (Address of principal executive offices)
  ___________
  (Zip Code)
  Registrant's telephone number, including area code:
  323-837-3700
  Not Applicable
  ______________________________________________
  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:
  [  ]  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))
  Top of the Form
  Item 1.01 Entry into a Material Definitive Agreement.
  As previously disclosed on a Current Report on Form 8-K filed with the SEC on February 7, 2007, on February 1, 2007, Innovo Group Inc.'s (the "Company") subsidiary, Joe's Jeans Inc., ("JJI") entered into a mutual dissolution agreement with Beyond Blue, Inc. to end its Master Distribution Agreement ("MDA") for the international distribution of its Joe's® and Joe's Jeans™ branded products (the "Dissolution Agreement").  As part of the Dissolution Agreement, the parties reserved certain rights relating to certain financial and other obligations between the parties pursuant to the MDA.
  On May 24, 2007, BBI filed a complaint in Los Angeles County Superior Court in the State of California (the "Litigation") asserting, among other things, certain of its reserved rights under both the Dissolution Agreement and MDA.
  In connection with the Dissolution Agreement, on May 25, 2007, JJI filed an arbitration claim with the American Arbitration Association (the "Arbitration") asserting, among other things, certain of its reserved rights under both the Dissolution Agreement and MDA.
  On July 3, 2007, the parties executed a definitive Settlement Agreement and Release ("Settlement"), a copy of which is attached hereto as Exhibit 10.1 and incorporated herein.  On July 9, 2007, the parties issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein.
  Under the terms of the Settlement, the parties have agreed to dismiss both the Arbitration and Litigation with prejudice and all related claims.  Additionally, BBI has agreed to pay $200,000 to JJI, and JJI has agreed to certain restrictions relating to its international business for a period of five years.  JJI has also agreed to fulfill certain purchase orders placed by BBI through October 31, 2007, and has agreed to honor and/or reaffirm the terms and conditions of certain written sub-distribution agreements, including certain current distributors of JJI.  BBI has also agreed to cease marketing, distributing or selling products or items bearing the Joe's Jeans™ and related trademarks, with the exception of fulfilling certain pre-existing obligations relating to purchase orders in certain territories through October 31, 2007.  In addition, each of the parties entered into a customary mutual release of the other party and customary indemnification provisions.
  The preceding description of the Settlement is a summary of the material terms of the agreement, does not purport to be complete, and is qualified in its entirety by the copy of the agreement which is filed herewith as Exhibit 10.1.  Exhibit 10.1 is incorporated herein by reference.
  Item 9.01 Financial Statements and Exhibits.
  (d)	Exhibits.
  Exhibit
  Number		Description
  10.1	        Settlement Agreement and Release*
  99.1		Press Release dated July 9, 2007
  *  The Company has omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and shall furnish supplementally to the Commission copies of any of the omitted schedules and exhibits upon request.
  Top of the Form
  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 hereunto duly authorized.
  Innovo Group Inc.
  July 9, 2007
  By:
  /s/ Marc Crossman
  Name: Marc Crossman
  Title: Chief Executive Officer (Principal Executive Officer), President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
  Top of the Form
  Exhibit Index
  Exhibit No.
  Description
  10.1
  Settlement Agreement dated July 3, 2007
  99.1
  Press Release dated July 9, 2007