Selden has just come from business with a client in Paris and is now relaxing for a week in Monte Carlo.
It's mid-April, and while strolling about Selden bumps into Mrs. Fisher, Mrs. Jack Stepney (formerly Gwen Van Osburgh), and Mrs. Wellington Bry. They're all standing around arguing over where they should have lunch. (The husbands are there, too, including a new guy named Lord Hubert Dacey.)
While they continue the lunch debate, Jack Stepney spots the Dorsets' yacht, the Sabrina, returning to shore, and remarks that they are back. Both Lily and Ned Silverton are on board with the couple.
The socialites are pleased that Lily is back, because she's been a smash hit among the social elite here in Europe. The Big Kahuna with whom everyone wants to be seen is the Duchess, who has taken a great liking to Miss Bart.
Selden is all, "Can I ever get away from this woman?" He thought he was done with her, but seeing the yacht and hearing her name makes him realize he's not over Lily just yet.
After lunch, Selden chats with Mrs. Fisher. She explains that she came along as a companion (and social coordinator) to the Brys. The Brys have money, but no social currency, so it's Carry's job to ingratiate them with all the right people.
It seems that, when Lily was in Aix ten years ago with Mrs. Peniston, a rich, gorgeous Italian prince wanted to marry her. Then his stepson showed up and she flirted with him, which nixed the marriage proposal. (In other words, Lily has been doing this for years.)
Mrs. Fisher offers one explanation: Lily does these things because she secretly despises the life she's trying to obtain. She thinks that's what makes Lily so interesting.
Then, she explains the current situation aboard the Sabrina: Bertha is pursuing an affair with Ned Silverton, and she needs Lily around to distract her husband George. Also, Lily has been snubbing the Brys, which is likely a bad decision on her part.
Selden is all, "Oh, look at the time" and excuses himself, explaining that he needs to return to Nice. Later, alone in his hotel room, he wonders aloud what he's running away from.
He feels that if he can go long enough without seeing Lily, he can "return to a reasonable view" of her.
Unfortunately, he bumps into her at the train station. (There goes that theory.) She's there with Ned Silverton, the Dorsets, and Lord Hubert Dacey. And they're all headed to Nice to dine with the Duchess.
On the train, Selden has time to observe Lily in earnest: he finds that her beauty has "hardened" and she looks less youthful. He sees that she's made herself a useful tool to everyone around her. Selden also thinks she is "on the brink of a chasm," which sounds to us like some pretty creepy foreshadowing.
Later, once in Nice, Selden has dinner with a companion of his and then wanders around outside for a bit. He notices two figures getting into a cab together late at night – Bertha and Ned.