Former HIH director Rodney Adler will face new legal action from nearly 3000 former shareholders who say the jailed entrepreneur dudded them into buying HIH shares.

Sydney lawyer Bruce Dennis has launched a civil suit against Mr Adler in the Federal Court on behalf of 2777 shareholders who lost a combined $65 million when HIH went into insolvency.

Mr Dennis has also lodged separate civil suits against reinsurer Hannover Re and former HIH auditors Arthur Andersen.

The shareholders represented by Mr Dennis – ranging from one who lost $6 million in superannuation savings to “mum and dad” investors with $15,000 losses – were encouraged to invest in HIH after Mr Adler told the media in 2001 he had bought more shares in the company.

It later emerged Mr Adler had bought the shares using HIH funds. The shareholders claim Mr Adler’s actions were deceptive, and they would not have acquired HIH stock had accurate information about Mr Adler’s actions been available.

The civil suit means Mr Adler, who was sentenced to four-and-a-half years jail in 2005 for dishonesty, could be back in the courtroom soon after stepping out of jail near Kempsey.

He could be released by the end of the year after serving two-and-a-half years of his sentence.

The suits stem from a 2005 action brought by Mr Dennis that was disallowed when a judge ruled a class action could not be brought against multiple respondents.

It has taken two years for him to finalise splitting the suit into three, and it was lodged just before the six-year statute of limitations applied.

He says the claim against Hannover Re relates to “sham” contracts in 1999 that HIH used for accounting purposes to inflate earnings. “They looked like reinsurance but they were really just loans.”

The final suit against Arthur Andersen relates to the auditor signing off the reinsurance deal.

Mr Dennis says legal rather than factual arguments could delay the cases being heard.

“If successful, (the claimants) would be ranked as normal creditors and entitled to a certain payout in the dollar,” he said. “A lot of shareholders who have made contact but haven’t formally instructed us are waiting on the fence to see if we win. We anticipate there will be more claims if we are successful in this class action.”

He says many of the shareholder claims overlap the three suits, and about one-third of them are directed at Mr Adler personally.

“I think that he had quite a bit of money but it’s unclear if we will be able to find it,” he said. “He is not bankrupt. Andersen is now closed down and Hannover Re has got reasonably deep pockets.”