The 100-foot maxi yacht returned to the Australian mainland after being ruled out of the 628-nautical-mile event due to a torn mainsail Saturday.
"Early reports indicate that the sail tore in half when the yacht was hit by a 40-knot squall that accompanied a southerly change off the NSW south coast," said a statement on the boat's Facebook page.
"The yacht is returning to Sydney. All crew are safe."
The number of entries pulling out had increased to 32 by 8 am local time Monday, making it the toughest race since 2004.
Jim and Kristy Clark's American maxi Commanche led from race debutant Rambler, an 88-footer owned by U.S. businessman George David, despite being handicapped by extensive damage.
The owners went head to head at August's Rolex Fastnet race, with Comanche taking line honors by just under five minutes while Rambler was a clear winner on adjusted time.
Comanche suffered a broken rudder which the crew had to try to repair at sea. Skippered by sailing legend Ken Read
, its team includes two-time America's Cup winner James Spithill.
Australian yachting great Syd Fischer's Ragamuffin, third on line honors last year, held the same position.
Italian debutant Maserati was fourth, having gone well out to sea in an attempt to avoid the southerly conditions which had been causing havoc with the fleet.
The race had a chaotic beginning in Sydney Harbor, when the official start boat took on water and its passengers had to be returned to the docks, while a hooter launched the competitors rather than the traditional cannon.
The larger boats opened up a big lead heading into open water, but Maserati was left among the smaller craft after hitting a buoy.
There were early casualties, including Chinese entry Ark 323.
"We were dipping down to avoid Rambler, but the boat below us (Ragamuffin 52) did not give us enough room. We have a big crack in our deck," crew member Faris Bin Aznan said on the official race website.
Lupa of London also came a cropper in the opening skirmishes.
"We were sailing on starboard tack from the start and three boats got locked together -- we were in the middle with nowhere to go," tactician Laurent Pages told the race website.
"We were left with the decision to run into the boat above us, or the one below us. This was the worst thing -- the worst feeling -- a stupid accident.
"The race director was very clear at the briefing this morning. The race committee told us all to take it easy at the start -- there was a whole race to go. If everyone listened, this would not have happened. We are shattered -- we came a long way. It seems so unfair."