A Federal Court post-mortem is the latest stage in a society saga, writes Vanda Carson.
It's not how prestige developer Gary Baker and his wife, fashion queen Karin Upton Baker, would like to be remembered. But the society couple's financial woes have made their story a cautionary tale for Sydney's top end of town.
Mr Baker is facing bankruptcy and the family is facing eviction from its Elizabeth Bay home after the dream development project overlooking Bondi Beach turned into a nightmare. It left the couple unable to pay mortgages of $18 million and facing a series of legal battles.
A post-mortem on how it all came undone was held in the Federal Court this week, providing insights into the couple's personal finances as well as the high-stakes world of Sydney prestige real estate development.
It is a world where generous property valuations are worth their weight in gold, as they can support higher bank borrowings. It is also a world where prices rise fast - and sink even faster when credit dries up.
The examination by the liquidator of one of Mr Baker's companies heard that the couple borrowed more than $10 million in 2006 as part of a risky development proposition in Bondi.
They planned to use the funds to buy the eight apartments at 6 Notts Avenue, a rundown 1963 building with postcard views of Bondi Beach.
The glamorous couple, usually seen rubbing shoulders with Sydney's elite, hoped to turn a quick profit by capitalising on growing demand for luxurious apartments thanks to an influx of new money into the trendy suburb.
The beachside strip is home to the former David Jones boss, Mark McInnes. The cricketer Michael Clarke and his then fiancee, Lara Bingle, lived there.
They hoped to transform the worst building on the best street into one to rival its polished neighbours.
The signs were promising - a neighbouring penthouse had sold for $9 million and on the other side is the Pacific Terraces building, a prestige apartment block that was once home to the billionaire James Packer and whose residents now include the fashion designer Nikki Zimmerman.
But the couple's plans were stymied when they were unable to get three of the owners in the building to sell for the right price. The Bakers were left holding five apartments in the block. Without ownership of the entire building, their development was unfeasible and they were stuck with a loan they could not repay or refinance.
Mr Baker recounted details of the immense pressure he was under as the couple's property empire crumbled.
In July 2008, Mr Baker said he was desperate to refinance his loans, which were due to be repaid to lender Challenger.
''I was running around town looking for money,'' he told the hearing.
Mr Baker had used a favourable $5.75 million valuation by LandMark White to show to other lenders - something that senior valuer Bill Fatouros had opposed.
''I've had enough of this f---ing bulls---,'' Mr Fatouros is alleged to have yelled at Mr Baker.
Mr Baker said Mr Fatouros ''flew off the handle'', slamming his hands down on a table and screaming at him, when Mr Baker tried to convince him to allow him to use the valuation.
''Bill was going off his brain,'' Mr Baker said.
''From that day on my relationship with Bill soured.
Another LandMark White valuer, Danny Sukkar, gave the rundown ground-floor apartment in the building the $5.75 million estimate.
The valuation was made as if the apartment had already been revamped into a luxury beach pad - and not on its decaying state. When the lender foreclosed, it sold for just $1.5 million.
Counsel for the liquidator, Michael Elliott, suggested the inflated valuations of the apartments just metres from the beach, Icebergs and Mr Packer's Bondi pad may have been the result of using inappropriate methods, a claim denied by Mr Sukkar and Mr Fatouros.
By having apartments valued on the basis that they were a ''development site'' - even before the Bakers controlled the whole building - the couple were able to borrow more than if they had been valued ''as is''.
More than two years on, it has emerged that the 47-year-old building more closely resembles the house in the Tom Hanks movie The Money Pit than its luxurious neighbours. Mr Baker, who wore a Hermes tie and belt for his appearance in the witness box, said the building was riddled with concrete cancer and the front of it was ''collapsing'', according to a geotechnical engineering report.
The saga has a way to run yet, with Mrs Baker now suing LandMark White, claiming Mr Sukkar negligently inflated the value of four oceanfront Bondi properties by millions of dollars, which left her saddled with debts she could not repay.