The family of jailed former NSW Labor MP Eddie Obeid will be forced to account for hundreds of thousands of dollars in cash payments they received from the Circular Quay cafes at the centre of his criminal trial, after losing a legal bid to shut down a court case brought against them to recover the money.

Obeid front company Circular Quay Restaurants, which ran three cafes on or near the bustling ferry wharves at the quay, went into liquidation in 2014 owing taxpayers almost $1 million in unpaid rent and other costs.

Eddie Obeid's wife Judith leaves the Supreme Court last year. Credit:Peter Rae

The liquidator appointed to the company is suing the Obeid family patriarch, his wife Judith and five of their nine children - Damien, Moses, Eddie jnr, Gerard and Gemma - in the NSW District Court for more than $700,000.

The figure includes $433,382 in cash payments the family members allegedly received from the businesses, plus interest and costs.