The collapse of New Cap Re in 1998 is having its sequel in the NSW Supreme Court, where parties to the company’s float are being sued by six investors who lost money in the collapsed reinsurer.

The investors are claiming $40 million plus interest, plus costs incurred over their loss of funds. They say they contributed large amounts of capital towards the reinsurer in the form of convertible notes, and claim their decision was based on a prospectus issued by Macquarie Bank.

The bank is a party to the lawsuit, as are Equity Capital Markets, Macquarie Equities, New Cap Re directors Jonathan Beach, Andrew Mutton and William Peck, and actuaries Trowbridge Consulting.

But before they can get a hearing, Justice Patricia Bergin wants to see the colour of the claimants’ security deposit: all $4.4 million of it.