Ryan treated Annie to a romantic New Year's celebration at the penthouse. In between embraces, Ryan admitted to Annie that his contribution to the psych ward ensured that Richie would remain locked up. The duo made love.

Richie left a reassuring message for Dr. Chambers, then received a visit from Lily. He became more interested in what she had to say when she mentioned that she was reading a book about the perfect crime. He asked to borrow the tome and picked her brain about how to get away with murder. Richie then left a cynical, cryptic New Year's message for Annie.

Jack spotted Erica across the room at the Yacht Club and greeted her. They accused each other of having issued the anonymous invitations they both received. They both denied it and concluded that Lily had probably brokered the setup. Jack asked Erica to stay and celebrate that their loved ones were safe. They agreed that they would always love each other and toasted.

As Zach looked on in horror, Kendall issued a full confession to Derek. Aidan and Greenlee urged Derek not to press charges. To safeguard his wife, Zach claimed that he's the one who should be arrested. A disgruntled Derek decided to table the matter for now. After he left, it was obvious to Aidan that Kendall's guilt over their night together was eating away at her. He dragged her into the hallway and beseeched her not to say a word about their indiscretion.... Zach and Greenlee's bond continued to deepen. Hannah showed up but Zach quickly sent her away. Greenlee suddenly passed out and Zach summoned help. Kendall and Aidan also rushed to her side. Joe determined that Greens was probably hypoglycemic. Once awake, Greens smiled to see that Kendall was standing by her. Later, Kendall kissed a sleeping Zach and told him she was sorry but that she "had to do this." With that, she slipped out of his room.... Aidan climbed into Greenlee's bed and snuggled with her.... Kendall showed up at the police station and once again copped to having set Greenlee up. She was booked for the crime(s).

Tad and Krystal were on the verge of consummating their marriage when Colby clomped downstairs looking for food. They resumed kissing after Colby left the house, but were interrupted again by Jenny's cries. After tending to the baby, Krystal and Tad got down to business.... Hannah got a message from Tad suggesting that they get together and talk. "I don't think so," said Hannah bitterly. She then opened up a scrapbook of Zach clippings and flipped through it.

ALL MY CHILDREN was preempted. Happy New Year!

At Babe's condo, JR told Babe about Amanda selling his alibi to Adam. Next, they exchanged presents, but JR got surly when he saw a present from Babe to Richie under the tree but regained his composure.

Hannah came to the Chandler manse and handed Adam a file that she claimed was akin to Zach's head on a platter. She explained that she's sold Chandler Enterprises off to dummy corporations, which she controls, and can sell the company back to him at bargain prices. Hannah bitterly assured Adam that she had covered her tracks carefully and made it clear that she would no longer do his bidding. It was obvious, though, that she had another trick or two up her sleeve....

Zach showed up at the police station and railed at Kendall for having gone against his wishes and confessing. Kendall was adamant that she had to face the music in order to alleviate her guilt. Jack arrived and volunteered to represent Kendall (he'd cleared it with Greenlee). Kendall was touched by his fatherly devotion and released on bail. Back at home, Zach tried to maintain his cool but the prospect of losing Kendall caused his emotions to overflow. The Slaters made love.... At the hospital, Greens and Aidan were closer than ever — but Joe was clearly concerned about her health.

Dr. Chambers went to the psych ward to see Richie, who announced that he had chosen the day he planned to die. JR also came to see Richie and warned him to stay away from Babe.

Jack informed Zach and Kendall that he's convinced the district attorney will accept a plea bargain, but Kendall rejected the idea of avoiding jail time by pleading diminished capacity. Against Jack's counsel, she insisted on making a full confession to the judge. Greenlee showed up with Aidan and surprised everyone by delivering an impassioned plea on Kendall's behalf. The judge sentenced Kendall to community service and fined her $50,000. Hannah was clearly unsettled to see Kendall let off with a slap on the wrist.

JR and Adam bickered over Adam's latest trickery (concealing the DVD containing JR's alibi). Adam apologized, but JR turned a deaf ear. Adam offered JR fifty million dollars to make amends.

Tad and Krystal took little Jenny out to breakfast and they ended up squabbling over Adam. They agreed to focus on the positive moving forward and Krystal resolved to put her feelings for Adam behind her.

At work, Annie and Babe discussed Richie and JR. Richie, meanwhile, fantasized about conning Annie into killing him and framing him for his murder. Richie contacted Annie and tricked her into rushing to the psych ward by claiming to be much sicker than he actually was. He prepared to launch his latest scheme to make her do him in, but he was interrupted by the realization that Annie hadn't shown up alone; Babe was with her.

At Greenlee's penthouse, Kendall, Ryan, Aidan, Zach and Greenlee celebrated Kendall's freedom. Ryan was unable to reach Annie. Zach and Ryan separately chatted with Aidan about his relationship with Greenlee. Ryan was pleased as he observed that Zach and Greenlee's dynamic had become very friendly.

At the office, Josh was alarmed by Hannah's erratic behavior and suspicious of her decision to sell off Chandler Enterprises. Hannah went home and stripped down to her bra and panties. She then trained a rifle on Kendall, who was still mid-party across the street. Ryan noticed Hannah just in time and as Hannah fired the gun, Ryan pushed Kendall out of the way — taking a bullet to the head in the process.

Annie was confused when Richie lost his temper with Babe during their visit with him at the psych ward. Quickly she figured out that Richie had lured her there under false pretenses. Babe left the siblings alone and Richie told Annie that he wants to make things right. He proffered a full confession to Annie in the form of a letter, to clear her name to their father. Richie then tried to grab Annie's hand to launch his scheme to make her fatally poison him. She was wary and made a break for the door. Just then, a doc barged in and told Richie he had some pertinent information. "It seems like you might live to a ripe old age, after all!" chirped the physician.