This whole part of the story is fabulous. So Chuck meets Lily at this restaurant and she's like, "I'm not staying for lunch, I just came to tell you to leave me alone, because of last week when you called me six different kinds of whore in front of our family and your girlfriend." Chuck whines about how Russell is setting him up, and she tells him it's all his fault and that he had her fired and that Bart's legacy can fuck a duck and whatever, Russell's going to be a great owner of Bass Ind. until he chops it into bits and eats the bits and pees on the bits and sets the bits on fire.
"What is it with this guy? You still have feelings for him?" Steam comes out Lily's delicate ears and she reminds him she's married, to the "man" they call Rufus Humphrey, and Chuck totally goes, "That didn't stop you from cheating on my father, I'm sure you'll do the same to Rufus!" Boom, slap, practically an open-handed punch, and Lily's out of there. Nice. Meanwhile, Russell is totally sitting at a table a few feet away listening to every word, as though he turned invisible when they walked in, and saw that whole slapping party without once interjecting.
Since the party's canceled and they don't need her "help" anymore, Serena has called Ben to meet her at the Plaza. She'll drop in on Eric, and then they can go do classy artsy things all day long. Eric comes downstairs in his fluffy robe looking like death warmed over, and of course reveals he's not actually sick: He just doesn't want to turn 18, because from then on it's just a downhill slide for twinks.
Out in the limo, Chuck and Lily are totally fooling! They are in on it together! Charles and Lily! So great! She admits it was satisfying to once again slap the shit out of her son, in public this time, and we realize that they staged it so that Russell would think A) He's won and split up their team, and B) He can sleep with Lily now. I'm sure he'll be calling soon.
So really though, why is Eric "sick"? Well, I'll tell you here in this hotel lobby: It's because Damien knows the facts about Lily sending Ben to jail in a fake way, and is thus blackmailing him to run drugs. Once again, Damien proves he knows what Lily's kids are good for. I'm guessing he also refused to have sex with Eric, causing him to fall totally in love with him but eventually driving him into Chuck's arms. Eric says this: "Damien's got his big coke shipment coming in today from Europe. It's arriving at the flower market in the fertilizer packs of a hundred pink tulips." Just another day on the UES.