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At the ranch, Nikki and Victor admire their Christmas tree. She tells him he couldn’t have given her a better Christmas gift than the ranch. They embrace and Victor tells his wife she deserves this and more. They’re kissing when Cole and Claire walk in. She teases about them feeling the “holiday spirit”. Nikki wishes them a happy Christmas Eve.

At Sharon’s place, Mariah and Faith have arrived to hear about the hypnosis session. Sharon tells them she had a breakthrough, “I realized… I don’t think I killed Heather.” She explains there was someone else in that apartment that night. Bits and pieces have come back to her. Heather was on the other side of the room from her when she died. She heard her cry out and fall. She remembered a presence near her and felt a gloved hand on her that pushed her onto the couch. She was struggling to maintain consciousness. Faith and Mariah think this is amazing. Sharon warns it will still be an uphill battle. They can’t prove anything. Mariah and Faith declare a Christmas miracle and they hug their mom.

At Society, Michael has filled Lauren in on what Sharon remembered during her hypnosis session. Lauren asks if he can use this is court. Michael says it’s not solid proof, but it’s a break. They need to discover what truly happened that night. Lauren can see her husband is all fired up. Michael hopes this takes Sharon’s guilt down a notch. They’re switching the focus of this investigation to the real killer. Phyllis appears and asks, “The real killer? What’s that supposed to mean?”

At the ranch, Cole tells Nikki and Victor he appreciates their invitation, though he realizes he’s a poor substitute for their daughter. They all discuss Victoria being ill. Victor takes Claire into the sitting area and she explains that Johnny and Katie have parties with friends but will come by in the morning. Drinks are served and Victor lets their granddaughter know that they’re happy she’s come back to them. He toasts to her first Christmas with the Newman family. Cole asks to say something and tells them this holiday has never meant much to him before, but having his daughter it now means everything. He gushes about Claire. “You are the brightest light in my life.” They embrace and Victor smiles. “That deserves a ‘cheers’.” Claire thanks them all for the love and support. She finally has a real home and a family that loves her. It feels like her first real Christmas. Claire trots out a gift for her grandparents… it’s a family portrait of the five of them. She tells them they’ve given her a life she never dreamed was possible. Victor and Nikki hug her.

At Society, Lauren tells Phyllis they don’t want to fight with her. Phyllis says Sharon’s the real killer and needs to pay a price. “Sharon did this.” She’s so tired of them feeling bad for her and making excuses for her. She’s seeking justice for Daniel and Heather. Michael says it’s fine to seek justice. Lauren tells her she’s justified in her anger. Michael says what happens to Sharon is out of her hands. Phyllis snaps, “The hell it is.” She is trying to hold her family together. “This is the first Christmas Lucy spends without her mother.” She barks, “Stop defending a killer.” She fears Michael has something in the works to get her out of this. Michael says things are not as simple as she thinks they are.

At Sharon’s place, Mariah and Faith keep talking about how relieved they are. They recap that Nick kept pushing for answers and discovered that the pills were tainted. Nick credits Sharon for being willing to undergo hypnosis. Mariah and Faith worry that the killer could have hurt her too. Sharon agrees it’s unnerving. She’s just happy she remembered everything. Nick bemoans the real killer still being on the loose. Faith muses, “Who knows what they have planned next.” Mariah asks if Sharon remembers any details about the killer. She doesn’t, but worries that Daniel needs to know about this if a new investigation will be launched. The killer is still out there. Nick says they won’t tell them tonight. It’s their first Christmas without Heather and this would be confusing and upsetting. They need to let them be for now.

In Society, Phyllis hollers that Sharon killed Heather, framed her son, and ran her off the road. Michael retorts that this is up for debate. Lauren implores Phyllis to trust Michael. Phyllis can’t believe they’re defending her family’s enemy. Lauren says there are things about the case she doesn’t know about. Phyllis gawps, “What don’t I know about? What do you know? Tell me!”

At the ranch, Victor admires the painting of him, his wife, Claire, Victoria, and Cole. Cole hopes he doesn’t mind him being included. Victor says he belongs in it and asks for a word privately. Claire asks Nikki what that’s about. Nikki hopes Victor’s not about to challenge Cole to a boxing match. She smiles, “Even he can’t deny how much Cole loves you.”

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In the sitting area, Victor tells Cole it’s Christmas time, so all are welcome. Cole anticipates another talk about staying away from Victoria. Victor says, “I may surprise you.” He notes he’s very protective of his family, and Victoria has been involved with men in the past who haven’t deserved her. Cole says he would never hurt Victoria. Victor knows that now. He can’t ignore their romantic connection or that he’s a very good father to Claire. Cole says they’re his family. Victor declares that he won’t stand in the way of any relationship with his daughter or interfere with them becoming a family. He was very pissed off at him after he and Michael went behind his back. “I was angry.” But he’s observed him, and thinks he’s a good man. “You take good care of my daughter, OK?” He welcomes him to the family with a handshake. Cole won’t let him down. In the living room, Nikki and Claire declare a Christmas miracle.

At Sharon’s place, they all agree they should wait to share the news with Daniel and Lucy. They won’t open up the wound on Christmas. Sharon is rattled to realize that Christmas is here. “I wish I had done more for the holidays for you two.” Faith and Mariah understand given what she’s been going through. Sharon says her whole perspective has changed. For the first time in months, she can breathe. That’s all the gift they need. Sharon still wants to do something. Mariah and Faith are up for it. Faith knows exactly what they need.

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Phyllis pulls up a chair at Michael and Lauren’s table at Society. Michael tells her there is new evidence that calls into question everything they thought they knew about this case. The police are possibly reopening the investigation. As Phyllis protests, Michael explains that the authorities are taking this seriously. Chance might even stake a squad car outside of Daniel’s apartment to make sure they’re safe. Phyllis says they should have protected them from Sharon! Michael tells her to let the police do their jobs. She needs to take her focus off of Sharon… when the new evidence comes out, she will regret her actions. Phyllis says, “The hell I will,” and stalks out.

At Sharon’s place, they’ve pulled out the decorations, and Nick comes through the door with a Christmas tree from the tree farm. Tessa arrives and gushes, “Oh, how festive!” She explains the sitter is with Aria, who was exhausted. She tells Sharon how happy she was to hear her news. Sharon marvels, “I almost lost all of this.” This has taught her they need to celebrate every moment they have together. She hugs her daughters. “Merry Christmas, girls.”

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At the ranch, Claire asks Victor if he and Cole had a good talk. He says her father’s a good man. Cole hands gifts off to Victor and Nikki from him. Nikki’s is a first edition Elizabeth Barrett Browning. Cole says she loved with her whole heart, just like Nikki. Victor opens his book. It’s the story of Muhammad Ali, signed by the great man himself. He’s moved. Cole thinks it seemed appropriate to gift the story of one greatest to another. Victor gives him a fist pump of approval.

Nikki tells Claire her gift will be there in the morning. She asks, “Is Santa bringing it?” Nikki reveals that the appaloosa horse will arrive at the stable in the morning. Claire gushes, “This is unbelievable! Thank you so much!” Victor shows her photos of the animal as Nikki tells Cole, “Good job with the books.” She asks how his talk with Victor went. Cole says he’s starting to believe in Christmas miracles.

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At Sharon’s place, Nick gets the tree where Faith wants it and they all pull ornaments out of a box. Tessa finds an angel that Sharon doesn’t remember. She thinks it’s from Cassie. Nick says she always looks out for her… for their whole family. Mariah feels Cassie is there with them and smiling down on them. Nick says, “Always.” Sharon hangs it on the tree and heads upstairs to get some of Cassie’s favorite decorations. Mariah tells Nick she’s getting back on track. Nick agrees. She’s convinced now that Heather’s death is not her fault. They’re sure Michael will find a way to prove the truth. Not just for Sharon, but for Daniel and Lucy too. They deserve to know who killed Heather. Faith feels she has her mom back. For tonight, that’s all she needs.

At Society, Lauren and Michael agree that Phyllis’ anger is justified and her pain must be unbearable. They talk about Scotty and Fen. They’re doing well and they’ll call them tomorrow. Lauren asks if he thinks Phyllis will stay out of this case. Michael hopes she finds a distraction. The problem is when it comes to Sharon, Phyllis isn’t good about letting bygones be bygones. There’s too much history there. Lauren hopes that knowing there’s new information will give her pause. Michael asks when she’s ever taken a pause. Lauren concedes, “Never.”

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At Sharon’s place, the tree is trimmed, and Tessa can’t wait for Aria to see the decorations tomorrow. Sharon thanks them for lifting her spirits. They’re wondering if it’s too late to call Noah when Phyllis arrives. Nick opens the door, and she says, “Of course you’re here. Of course.” Sharon asks, “Shouldn’t you be at home with your family.” Phyllis just talked to Michael, who told her there is new information that could reopen the case into Heather’s death. “What the hell are you up to?!”

At the ranch, they’re ready to light the tree. Victor pushes a button and the lights in the room go out. Next, the tree lights up. Cole marvels, “Wow!” Claire thinks it looks like it’s out of a movie. She wishes her mom was there. Cole assures her they’ll be together for every holiday to come. They wish each other a Merry Christmas.

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At Sharon’s place, Phyllis tells her she should be in a prison cell. Mariah says her mom isn’t trying to pull anything. Faith says she should be with Daniel and Lucy. Phyllis says she was earlier; giving them some semblance of a holiday since it’s the first holiday without Heather thanks to Sharon. She complains the blonde has one excuse after another. Sharon says she was wrong. “I’m not guilty. I didn’t murder anybody. Somebody else killed Heather!”

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Next on The Young and the Restless: Kyle receives a special gift from Jack, Phyllis delivers some holiday cheer, and Diane wants to make amends with Ashley and Traci.