Y&R Recap August 26: Lily Promises Billy Chancellor on One Condition

On the Wednesday, August 26, 2026, episode of The Young and the Restless, Lily got bad news, Nick and Victor shared a visit, and Victoria and Kyle continued their flirtation.

Lily's Devastation and Recovery

Jack gives Lily some bad news | Image: JPI

As Lily told a mystery person on the phone that she was not going to give up Chancellor to Billy without a fight, Jack arrived. She was sure he would have good news, but Jack delivered anything but. He told her that while he appreciated the offer to pay the debt owed to the Abbotts. He had to turn her down.

A stunned and devastated Lily didn't understand. Jack explained that his father had the chance to pay the debt, but he didn't because there was every indication that the claim was a legit one. Jack reminded Lily that this was his personal decision, but his siblings would have to speak for themselves. Also, she and Billy would need to work this out on their own.

Jack also had a warning for Lily. She also knew the claim was legit since she had offered to pay the debt. Lily needed to understand that Billy held all the cards here, not her. She might want to back down and let Billy have the win. Lily heard what Jack had to say, but she didn't like it.

After Jack left, Billy called, ready to talk business. He asked to meet so they could sign the paperwork that gave him Chancellor. She wanted to meet without lawyers, just to talk. Lily even agreed not to lecture Billy. So, Billy came over. Lily even whipped out some old memories when she brought out her golf putter.

Billy was pleased when Lily informed him that Jack was on his side. She had offered to pay the debt, but Jack refused to bite. Billy asked if they could just do the ownership transfer cleanly and easily. Lily was not about to do that. Instead, she issued Billy a challenge because she had the upper hand for the moment.

He needed to prove to her that he was the best person to run Chancellor Industries. If he could do that, the company was his fair and square. "I want you to prove that you can run Chancellor, but I promise you, it's not going to be an easy sell," she said.

Father-Son Reunion

Victor and Nick shared an emotional moment when Victor visited his son in rehab for the first time. Nick had to admit to his dad that he feels shame whenever anyone visits, but Victor told him not to. He did not feel ashamed of Nick. "You're my son," Victor said.

After some more encouraging words, Victor invoked Nikki and told Nick that he could be an example for people once he comes through this, just as Nikki always has been as she continues her battle with alcoholism. The subject of Marie came up when Nick informed his father that he had made a friend whose life he saved. Now, they were in rehab together.

Victor seemed concerned that Nick was getting in too deep with another patient and wondered if things were becoming too intense and worried that this friendship with Marie could hinder his recovery. Nick was sure it wouldn't. He was determined to get sober and would put in the work.

After Victor left, Nick had another encounter with Marie in the rec room where they discussed puzzle techniques. Nick could tell something is off with Marie, so she finally admitted that her husband had filed for divorce. "His lawyer reached out and he's made all these plans without me. Not a word. Just did everything behind my back," Marie said.

She also wanted to score some drugs and was sure that confiscated drugs were somewhere on the property. She wanted to find them, but Nick had to talk her down from that idea by getting her to open up about her marriage. "He's going to make it all my fault and make me feel like a failure again. At everything," she said.

Nick explained to Marie that if he helped her score drugs, then he would want some for himself, and he was not about to be tempted like that. After visits from his parents, Nick knew he had to get clean and back to his family.

Temptation and Cosmetics

Kyle and Victoria discussed business and other things | Image: JPI

Victoria dropped by Kyle's office to see if he had given any more consideration to her idea with revive Vibrante without Audra's involvement. Kyle was clearly interested, but they both admitted they had not spoken to their fathers about this. They just figured if it's a success, then Victor and Jack couldn't argue, right?

Victoria was confident in their success, but wondered why Kyle had a certain look in his eyes. Things started to get more intense as they discussed makeup. Kyle looked at Victoria's face and could tell she was wearing Newman Cosmetics Foundation. When Victoria offered to take it off, Jack and Diane appeared to destroy the mood.

A flustered Victoria stood up as a curious Jack and Diane asked what was going on and why Victoria was there. Kyle said he would fill his parents in when they returned from that vacation they had been planning. That satisfied Jack and Diane, so they left, meaning Kyle and Victoria were alone in the same room again.

The mood grew tense as Victoria and Kyle oddly flirted with one another. They finally decided to toast to their new venture and whipped out the booze. Both of them believed that this would drive Victor nuts, which is just what they wanted. Kyle and Victoria looked forward to having fun with their new business idea as they sipped their alcohol and looked into each other's eyes.

Too bad Kyle's parents were not as on board with whatever was going on as they believed. After they left Kyle's office, Diane told her husband that she didn't trust Victoria one bit.

Are you enjoying Kyle and Victoria or does it seem wrong and creepy? Sound off in the comments.