PART I: Ryan (Cameron Mathison) sets a romantic scene for his delighted wife as New Year's Eve rolls around. Meanwhile, in the psych ward, Richie is surprised to receive a visit from Lily. With the end of year festivities in full swing at the yacht club, Erica and Jackson realize they've been set up to meet by an anonymous texter... Anxious to protect both Kendall and Greenlee from prosecution, Zach urges Derek to arrest him instead...

PART II: Krystal reminds her new hubby of the first New Year's they spent together. Lily tells Richie how she overheard him talking about a murder, then gives him a mystery novel which outlines a formula for committing the perfect crime. Derek issues an ultimatum to Aidan and Greenlee (Sabine Singh / Rebecca Budig). Hannah is pleased to hear Derek vowing to take Kendall (Alicia Minshew) down. Richie slyly prods Lily to explain how someone could pin a homicide on an innocent third party.

PART III: Aidan fears Kendall is on the verge of spilling the beans about their sexual indiscretion. Jack admits to Erica (Susan Lucci) that despite his protestations he will always love her. After Zach falls asleep, Kendall sadly kisses him goodbye and slips out. Annie and Ryan make love as they ring in 2008 with high hopes for a better year ahead. Across town, Richie makes plans of his own. Kendall confesses everything to Derek ...