Following his suicide Hamilton's funeral takes place with Richard barring Charity from attending. . The bitter widow demands a reluctant Freddie runs the hotel and dismiss Richard, whom she blames for recent events. However Freddie recognizes Richard's skill as manager and, having reconciled with Toby given their mutual hatred of their father, refuses. Bigoted chef Parry openly bullies Austrian refugee Max Klein, the new kitchen porter, confusing him with a German, whilst O'Hara redeems himself by giving a rousing speech to the guests and helping Richard prevent Charity from writing a memoir exposing her affair with Hamilton.
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