Selden receives a telegram from Lily asking for help in this Dorset mess. He wishes to help avert a scandal, and especially doesn't want Lily involved in "the public washing of the Dorset linen."
He meets with Dorset and tells him to appear non-committal to one course of action or the other when in public. Then, he sends a telegram back to Lily telling her to "assume that everything is as usual."
Everyone does. Lily finds it absurd that Bertha acts so defiantly toward her, when in fact Lily is the one who can help her smooth out the situation. She feels as though Bertha is "pushing away her rescuing hand." She also notes that Ned Silverton is absent from their company.
When Lily bumps into Selden, he tells her not to worry, as he thinks that he's calmed George down.
The truth is, Selden has noted a change in Dorset's attitude, but he doesn't credit himself for effecting the change. He's not sure why Dorset is suddenly placated, but the unknown source of this shift in attitude makes Selden nervous.
Selden also feels bad for Lily. He knows that this whole scenario is undeniably Bertha's fault, but he also knows that when blame lies so clearly with one party, that party is likely to try and blame someone else. He also remembers Carry Fisher telling him that George Dorset would definitely marry Lily if his marriage to Bertha fell apart.
He runs into Lord Hubert and Mrs. Bry, who invites him to join them, the Dorsets, Lily, and the Duchess for dinner ashore. He does.
At dinner, the Stepneys and Lord and Lady Skiddaw are also present. In other words, everyone who matters is at this dinner.
Before the meal, Selden takes Lily aside and begs her to leave the Dorsets and their yacht. He doesn't want her involved in the mess that's unfolding between George and Bertha. Lily thinks he's being absurd and insists that nothing will happen. Besides, she still feels loyal to Bertha for providing so well for her.
Over dinner, Selden has the opportunity to observe Lily at length. He muses on her beauty, but also her charm and grace, and decides that she is "matchless" among these other women. He admires her, but there is little "personal feeling" left in his observation. In other words… he's over her.
Selden also notices the gossip columnist, Dabham. Selden wonders how much he knows about the Dorset mess.
Dinner draws to a close and George rises to get Lily's coat so that they can all go back to the yacht. Then, Bertha says, loudly enough so that everyone can hear, "Miss Bart is not going back to the yacht."
George tries to insist that this is some sort of mistake, but Bertha simply repeats herself.
Lily, trying to make a good show of it, explains to everyone that she has some business to attend to early in the morning and it is easier for her to remain ashore. We're pretty sure no one buys it.
The party breaks up and Selden escorts Lily outside. She asks him if he knows anywhere where she can spend the night without running the risk of a scandal.
Selden says she should go to the Stepneys – Jack and Gwen. Lily begs him to come up with something else, but Selden insists it's the only option.
Selden meets with Jack and discusses the matter with him privately. Jack agrees to let Lily spend the night on the conditions that she is gone early in the morning and that his wife not know about it.