At the Forrester mansion, Eric mirthlessly tossed aside Christmas decorations. He wandered over to play the piano but stopped upon seeing a picture of himself and Stephanie. His countenance fell, and Pam asked if he planned to play something. Eric shook his head and noticed that he smelled pot roast. Pam said she was cooking and decorating. He asked if she'd done what he'd asked her to do, but Pam wished he'd reconsider for the family's sake. "The family will be fine," he replied.
Rick and Caroline arrived and said they'd wanted to see Eric before they went to the guesthouse to continue their brainstorming for the competition. "Is that what they're calling it these days?" Eric wondered, and the embarrassed Pam laughed. Pam asked the couple to stay for Christmas Eve dinner, but Eric told them that they could go to do what young people did. Hugging his father, Rick replied that it was Eric's first holiday without Stephanie, and it was okay to lean on family.
Rick said he was looking forward to a traditional family holiday, just like Stephanie had always planned for them on Christmas Day. Eric and Pam exchanged glances, then she asked if Rick would wear the sweater she'd knitted for him. Rick stammered, and Eric escorted the couple out the door.
Pam said that Eric had heard Rick's words; the holiday was upon them, and the family would expect Eric to be there. She tried to convince him not to disappoint the family, but he said he didn't want to hear any more about it. Instead, he asked if she'd done what he'd requested. She nodded but asked him not to do it. Eric said he realized it was hard for Pam, but it was what he wanted.
In the guesthouse, Rick was shocked that Caroline actually wanted to work, but Caroline was certain that Eric wouldn't play favorites in deciding on the competition. Rick agreed, and Caroline complimented him for being a caring son. He guessed he'd been scoring serious points with her by being honest and compassionate with his family. Rick believed that Eric had been right when he'd said that Caroline was good for Rick.
Rick dragged Caroline away from her sketchpad to think about their next meal. They joked about Pam's food, and Rick said they'd have plenty of that on the holiday. Caroline beamed about having her first Forrester Christmas, and Rick added that it was the first of many.
Rick thanked Caroline for reminding him of how he should behave as a son, as a brother, and as a man. Caroline thought it had been all him, but he disagreed because he was sure he would have kept the secret. He looked forward to mending things with Hope. Thanks to Caroline, the knot in his stomach had gone away after telling the truth, and he felt much better.
At Forrester, Steffy rushed into the office, and her brother asked what was wrong. She said she wished she'd been wearing the Intimates line when she'd just seen Liam. Thomas rolled his eyes, and Taylor asked if Liam were back. Steffy replied that Liam was back with her, where he belonged.
Thomas wished Steffy would concentrate on the competition instead of her boyfriend. Steffy quipped that she hadn't been gone that long, and she wasn't worried about competition against Hope or Rick in anything. Taylor grinned and cited that it was good to see Steffy happy.
Thomas resumed sketching, and Taylor informed her daughter that the lawyers had said the loophole in the contract would stand. Taylor thought it had been unfair of Stephanie to strip Thomas of his position and shares, but Steffy replied that it had made Thomas more driven -- and bossy. Taylor was sure the bossiness would go away once they were back on top where they belonged.
Thomas stepped out, and someone named James delivered coffee to the women. Taylor was glad Liam would be there for the holidays, and Steffy said she would have lost it if he'd been on the trip still, because it was hard enough without Stephanie. The two discussed going to Eric's house for the holidays, but believing that the Logans would be there, Steffy said it wouldn't feel like Christmas.
Instead of Christmas with Eric, Steffy and Taylor decided to help out at the shelter in honor of Stephanie. Steffy revealed that she was having a Christmas miracle by being with Liam without secrecy or Hope's interference. Steffy said she'd never felt more confident about what was ahead.
On the grand terrace at Bill's house, Liam was stammering after Hope kissed him. He asked what that had been all about, and Hope exclaimed that she never should have doubted him. Liam was confused, and Hope explained that Othello and Rick had accused Liam of making out with Steffy at the club the night before the wedding. Liam was astonished. Hope said she'd just learned that it had all been a lie.
Hope conveyed that merely going out with Steffy that night hadn't been enough to break up their relationship; however, Hope had been caught up in the lie that Liam had betrayed her. Upset, Liam asked if Rick knew what he'd done. Hope took Liam's hand and said Rick hadn't done anything that couldn't be fixed.
Hope apologized because she should have trusted Liam, who'd never kissed Steffy at all that night. Liam stated that it was true; he hadn't done that. Hope said Liam was the man he'd always been, but she'd trusted her brother instead of listening to Liam. Hope vowed to never lose faith in Liam again. She implored him to forgive her, and they kissed.
Due to the Christmas holiday, CBS aired an encore episode of The Bold and the Beautiful. This programming change was planned for, so there will be no "lost" episodes as a result of the scheduling change. Regular programming will resume on Wednesday, December 26, and pick up where the Monday, December 24 episode concluded.
At the Forrester mansion, Pam welcomed all the Forresters. They joined together to decorate the tree. Kristen, Tony, Thorne, Felicia, Rick, Caroline, Donna, and Brooke added ornaments and bows to the tree. Pam tried to persuade everyone to stop adding so much red, and they argued that red was a perfect Christmas color.
Brooke suggested that they leave some decorating for Taylor, Thomas, and Steffy, who had volunteered at the pediatric ward. Everyone wondered where Hope had gone, and Brooke said that she had volunteered at the shelter.
Pam went outside to take in some gifts. She tearfully sighed when she neared the door, but a bluebird singing in a tree made Pam smile. She flashed back to a time when Stephanie had promised that she would never be far from Pam. Stephanie had vowed to be looking over Pam's shoulder like a bluebird in the tree. Pam laughed, and the bird sang.
Pam burst into the house and shared her experience. Thorne noted that it was possible, and Pam didn't appreciate him patronizing her. Felicia told Pam that they all believed her. Everyone smiled and continued to decorate.
Marcus and Dayzee entered with gifts and greetings. The family thought that Eric had been with Marcus, and Marcus was surprised that Eric was not at home. Everyone turned to Pam for an explanation. Pam admitted that Eric had requested that Pam provide dinner and a memorable evening for the family. She said that Eric was gone and wanted to be alone for the day.
The family insisted that Pam tell them where Eric had gone. Pam said that she had promised Eric not to disturb him. Thorne picked up a few of Pam's lemon bars, and warned that she had to tell them where they would find Eric. Pam refused, and Thorne threw lemon bars at the mirror in the living room. Felicia joined him in the lemon bar toss, and Kristen demanded to know where Eric had gone.
At Bill and Katie's, Bill fed Will a bottle and offered a funny explanation of Christmas. Bill explained that Santa was a guy who had a bunch of midgets wearing ugly green suits working for him. Katie entered and wondered when Liam would show up. Bill said that Liam, Karen, and Danielle had all been invited.
Bill continued his Christmas explanation to Will. Bill added that Santa spent Christmas Eve driving around the globe, delivering useless junk to children, and it all became broken or lost by New Year's Eve. Bill said that the really good stuff was trust funds that mommies and daddies invested in. Katie laughed at the explanation.
Bill and Katie sat down and cuddled Will. Bill confessed to Katie that he'd had a conversation with God when Bill thought he was going to lose Katie. Bill and Katie kissed and cuddled with Will.
At the Staples Arena, Eric was dressed in his tuxedo and stood in a private balcony box, overlooking the theater. He asked one of the ushers if everything had been prepared. The usher said that the facility didn't allow what Eric had wanted, but they had bent the rules and made special arrangements for Eric. The usher motioned to a nearby table and asked if Eric's guest would be joining him soon. Eric said that she was already there.
The usher left, and Eric mixed martinis. He poured them into two glasses and added olives. Eric sat at the table and toasted the glass across from him. "Merry Christmas, my love," he said. Eric sadly gazed at the empty chair and sipped his martini.
Eric recalled when Celtic Woman had sung "Danny Boy" in the living room of the Forrester mansion, and Stephanie had tearfully enjoyed it. Onstage at the Staples Center, Celtic Woman sang "I'll Be Home for Christmas." Eric flashed back to happy moments with Stephanie. He recalled many dances with her over the years from when they had been young to more recent years. He remembered times that he and Stephanie had laughed and kissed in bed -- when they were much younger and more recent times. Eric's flashbacks finally included times that he and Stephanie had kissed at the piano after he played Christmas carols.
Celtic Woman sang "Have Yourself a Merry Little Christmas," and the entire Forrester clan filed into the private theater box behind Eric, but he didn't notice because he was lost in thoughts of how Stephanie had blown kisses to the family and told them that she loved them. Eric turned and saw his family.
The song had ended, and the lead singer called attention to all the people who could not be present for the holiday. Eric turned to his family. Pam worried aloud that Eric would be angry, but he smiled and said that it was fine. Brooke said that no one wanted Eric to be alone on Christmas, but he said he wasn't alone. The family noticed the two martini glasses.
Rick said that they would leave if Eric wanted them to leave him alone. Eric shook his head. Felicia told her father that the entire family missed Stephanie. "Don't make us miss you too," she said. Eric agreed Felicia was right. He emotionally said that they had arrived just in time. A tear ran down his cheek.
Celtic Woman sang "I'm Dreaming of a White Christmas." The Forresters sang along, and Eric hugged Pam.
At the end of the episode, Stephanie appeared onscreen alone and said, "Merry Christmas." A bluebird sat on her shoulder and chirped.
At home, Hope recalled finding out the truth and then telling Liam what she'd learned. Brooke arrived home, and Hope happily relayed to her mother what had happened with Liam. Brooke wondered how Liam had responded to the kiss, and Hope said, "Like a man living with Steffy." Hope stated that he hadn't encouraged it, but she could feel that there was still something between them.
Brooke seemed dubious about the couple, but Hope remained optimistic because she knew the way Liam looked at her. She said Liam couldn't respond because he was with Steffy. Hope was still upset with herself for believing Rick over the man that she loved, but instead of wasting her energy on that, she declared that she'd focus on getting Liam back.
Hope wasn't na´ve about the situation, and she'd realized that she'd lost a lot of ground. She said she might not even get Liam back, but she'd regret it if she didn't try. She already regretted not listening to Liam when he'd been telling her the truth, and she wished she'd had more faith in him. Hope said she was headed upstairs to get changed, because she had a lot of work to do.
On the Forrester Creations rooftop, Caroline reflected upon the time Bill had questioned her loyalty to the family and the time he'd asked her not to go to Hope. Caroline called Alison, found out that Bill was at home, and decided to track him down at his house.
At Bill's house, Bill flashed back to the kiss he'd shared with Brooke. He snapped out of it when Katie entered, announcing that Will was sleeping. Bill and Katie chatted about how good it was for her to be home and what kind of man Will would grow up to be.
Bill asked what Katie wanted to do for New Year's Eve. He suggested inviting the family to their house, but Katie imagined a quiet night at home with champagne and a roaring fire. "Sold," Bill replied, and they kissed.
The couple cuddled on the sofa for a while, and then Bill's phone rang. Katie went to check on Will while Bill answered the call. It was Brooke, asking him to meet her at the private cabin on her property because she needed to talk to him. Bill agreed, and when Katie returned downstairs, he told her that he'd be back as soon as he took care of some business.
Later, Caroline arrived to see Bill. Since he wasn't there, Caroline decided to wait. She was troubled because she knew Bill would be furious with her, but she had to face him head-on. Katie asked what was happening, and Caroline told Katie about Rick's lie and how it had gotten exposed. Katie readily guessed that Caroline felt Bill would be furious because he hadn't wanted that to happen.
At Brooke's cabin, Bill met with Brooke. She'd asked him there to talk about Liam and Hope. Brooke hadn't wanted Bill to find out about Liam and Hope in front of Katie, because Brooke knew that he'd be really upset. Bill stated that there was no Liam and Hope, and Steffy was with Liam, as it should be. Brooke replied that it remained to be seen because Rick had confessed his lie to Hope.
Bill became upset that Hope might spin back into his son's life again. Brooke grimaced. Bill said he was sorry, but Hope wasn't right for Liam. Brooke asserted that Hope hadn't gotten a fair chance. Recalling that he'd done questionable things, Bill realized that it could get ugly.
Brooke informed Bill that Caroline had persuaded Rick to be truthful. Bill erupted in anger, raging that he'd talked to Caroline about her loyalties. He said that no matter what Caroline thought about right and wrong, it was wrong to betray one's own family.
In the cliff house bedroom, Liam was in a daze as he recalled what had happened with Hope the other day. Steffy asked what he was thinking about. He said nothing, but when he responded vacantly to her kiss, she realized something was bothering him. Liam replied that it was something she should know.
Liam told Steffy that Rick had convinced Othello to tell Hope that Steffy and Liam had been making out at the club the night prior to the last wedding. Steffy exclaimed that it wasn't true, and Liam added that it had been the reason that Hope hadn't believed his version of things. Steffy asked how he'd found out, and he said Hope had told him. Steffy sighed, realizing he'd been with Hope.
Liam guessed that Rick had thought he'd been protecting Hope, but Caroline had convinced him to tell the truth. Rolling her eyes, Steffy said Liam should tell her about it. Liam explained that Hope had run to him and kissed him at his father's house. Steffy wanted to know how Liam had felt about it. He said that he'd been surprised, but she replied that she was looking for a deeper reaction.
Liam explained that he'd already asked Hope to return to him for the final time; Hope had lost faith him, but Steffy never had. Steffy asked if the new revelation changed things, but Liam said he liked who he and Steffy were together. To him, it was natural and fun, and Steffy was the one to make him smile. They kissed, and Steffy decided to get her day started. "I've got business," she told him.
At Brooke's house later, Hope was preparing to go out when Steffy arrived. Hope guessed that Liam had told Steffy about Rick's lie. Steffy asked what Hope planned to do about it. Hope stated that she wasn't in denial about things, and she understood that Liam and Steffy were sharing a home. Steffy jokingly guessed she needed to rush to the altar, and she quipped that Hope could make the world record for the most failed marriages.
Unfazed, Hope acknowledged that she'd played it that way before, but she was interested in getting Liam back, not rushing into marriage. Hope said she'd realized that she'd made a lot of mistakes, and it would take a lot of work to win Liam back. Steffy claimed she wasn't threatened, because she had the guy, and he was happy.
Steffy, however, was curious about how Hope would go about fighting for Liam because Hope wasn't "that type." Hope responded that Steffy didn't know what type Hope was. Hope explained that she was changing and evolving. She said she'd let Steffy know how it turned out -- and Liam, too. Steffy guessed that was a threat. Hope, however, replied that she couldn't threaten Steffy. "But here's what's different -- you can't threaten me," Hope stated.
Steffy asserted that Hope shouldn't do it, because she'd had her chance with Liam. Steffy claimed that she and Liam loved each other, and Rick's lie wouldn't change things. Steffy told Hope to respect Liam and Steffy's relationship and not interfere. "I won't accept it," Steffy said.
At Brooke's cabin, Bill fumed about Caroline and her disloyalty. He seethed that it was totally unacceptable for Caroline to go against his wishes, and nobody did anything against his family without repercussions. "Especially if that person is a Spencer," he added.
Brooke thought Bill was overreacting, and Bill wondered why Brooke had changed her mind about Liam and Hope. Brooke stated that she'd changed her mind when she learned that they weren't the sole cause of their problems. Bill insisted that Liam was with Steffy, as it should be. Brooke replied that it might work out that way, but it was up for their children to figure it out for themselves.
Bill figured he could still offer counsel. "Seriously, Stallion, haven't you learned your lesson yet?" Brooke responded. He asked if she was okay with Hope jumping back on the roller coaster, but Brooke said it was out of her hands. She further believed that Bill could lose Liam if he tried to control things.
Bill guessed Hope had gone to Liam. Brooke noted that Steffy and Liam would be married had it not been for the lie, but Bill insisted that Hope wasn't right for Liam. Brooke said something had awakened within Hope, and she'd kissed Liam. Hope was determined to get Liam back, and they needed to let things play out. Bill murmured that Caroline shouldn't have pushed it, and "all hell" was going to break loose.
At Katie's house, Caroline fretted about Bill's reaction to Hope knowing the truth. Katie understood why telling the truth was important to Caroline, and Katie decided that she'd run interference with Bill if Caroline had any trouble with him.
Rick arrived because he hadn't wanted Caroline to face Bill alone. Katie asked if they'd told Hope about Bill's role in Italy, and Rick said they hadn't wanted to jeopardize Bill and Liam's relationship. Caroline added that she was hoping the gesture would prove to Bill her loyalty to the family.
Rick and Caroline waited for Bill, but after a while, Rick needed to get back to the office to keep preparing for the showdown. Katie left to check on Will, but she said she'd see Rick and Caroline later if they decided to leave.
Caroline walked onto the grand terrace with Rick and decided that she really wanted to wait for Bill. She figured Bill should hear it from her, and he wouldn't be that hard on his own niece. Rick offered to stick around, but Caroline said she could handle her uncle. Rick left, and Caroline looked worried.
Back inside, Katie saw that Rick and Caroline weren't there. Katie flashed back to when she'd confronted Bill about his Italy schemes, and he'd promised to be a better man. Bill entered in a bad mood. He said he'd been looking for Caroline, and Katie replied that Caroline had just been there.
Katie explained that she knew what was going on, and he said that Brooke had tipped him off about the situation. Bill couldn't believe that Caroline couldn't understand how volatile the information was, or how much trouble it could create for him and their family. Katie felt that Caroline had done a good thing, but Bill roared that the last thing Liam needed was "that girl" messing with his head.
Bill waved the drink he'd poured himself around as he ranted that doors had been closed and needed to stay closed. Katie told him to calm down and wondered if he really needed the drink. Bill raged on that Hope thought she had a chance with Liam. Katie asked who was to say that Hope didn't. Exclaiming that Hope and Liam were adults, Katie ordered him to let them live their own lives.
"Where is Caroline?" Bill grumbled as he refreshed his drink. Katie wanted him to promise not to rail on Caroline, but Bill raged that Caroline had betrayed him. Katie replied that Caroline had protected Bill's relationship with Liam by keeping quiet about Italy.
Will's cries interrupted them, and Katie went upstairs to feed the baby. Bill took his drink outside and spotted Caroline roaming around on the grand terrace below him. He strode down to where she stood text-messaging on her phone, and he startled her as he abruptly neared her. "You betrayed me!" he snarled.
Back inside, Katie answered the door for Brooke, who'd arrived looking for Bill. Katie explained that Bill wasn't in a good mood, and Caroline had been there before Bill had arrived. The sisters discussed how neither of them had gotten very far in convincing Bill of Caroline's motives. Katie said she was glad Caroline had left because it wouldn't have been good for her and Bill to be face-to-face.
At Brooke's house, Steffy didn't see why Hope thought anything would change. In Steffy's eyes, Hope had believed her brother over Liam, and Liam had moved on. Hope said she understood that Steffy would like the truth not to make a difference, but it was up to Liam.
Steffy was sure that Bill would think that Caroline had betrayed the family once he learned what she'd done. Steffy wondered why Hope had kissed Liam. Acknowledging that Liam would always have feelings for Hope, Steffy said, "coming onto him" wouldn't work. Steffy claimed that he was happy, and that was what Hope had always wanted for him. "I can be what he needs," Steffy added.
Hope considered that it was possible, and irritated, Steffy figured that meant that Hope wasn't backing off. Hope doubted Steffy would back off if the roles were reversed. Steffy insisted that Hope had been the one to end things, even after Liam had said nothing had happened. Steffy asked if Hope had any idea of how hurt Liam had been when Hope had turned her back on him.
Steffy asserted that Hope had shoved Liam into Steffy's arms, and Steffy planned to hold on tight. Hope wasn't surprised to hear that Steffy wouldn't give Liam to Hope. "I did that, but you wouldn't," Hope added. Hope acknowledged that Steffy had all the power, but Hope declared that she wasn't giving up. "Why are you doing this?" Steffy asked with an annoyed drawl.
Steffy didn't even understand the point, because something was always in the way for Hope and Liam. "Or someone," Hope added. Steffy acknowledged that she hadn't played fair in the past, but she said Hope couldn't accuse her of that anymore. Hope replied that she hadn't thought Steffy had manipulated herself back into Liam's life or his house. "Or his bed," Steffy added.
Steffy claimed that she and Liam had been in bed when he'd told her about Hope's kiss. Hope stated that she knew Steffy and Liam were not just roommates. Hope understood that Steffy didn't want Hope to interfere in the relationship, but the best Hope could offer was to not lie or play tricks while fighting for Liam. Hope made it clear that her stepping aside days were over, though. Steffy quipped that there would be another generation of the Logan women stealing men from her family.
Hope scoffed, saying that it hadn't happened that way, but Steffy insisted that Brooke had used her sexuality to take Ridge from Taylor. Hope stated that she wasn't her mother, and though she wouldn't be running around in her underwear, Steffy shouldn't underestimate what Hope had to offer Liam. Hope said the choice would be Liam's, but Steffy rebutted that Liam had already made his choice.