A New York judge has given the green light to collapsed hedge fund Amaranth Advisors’ lawsuit against JPMorgan Chase, accusing the firm of breaching its client agreement as Amaranth’s prime broker.

According to Amaranth, which imploded after losing more than $6 billion on bad natural gas bets two years ago, alleges that JPMorgan refused to release money the hedge fund had in its prime brokerage account that it needed to close a deal with Goldman Sachs to buy the toxic natural gas trades. Amaranth said JPMorgan used its position as clearing broker to refure to executive a Sept. 18, 2006, trade that would have sent Goldman its natural gas portfolio and $1.85 billion. JPMorgan and Citadel Investment Group later bought the trades, after Goldman had pulled its offer, for much less than Goldman’s offer, turning a substantial profit for itself.

Although the proposed deal with Goldman had the Wall Street giant taking on all further losses from the trades, JPMorgan argued that it would have been stuck with potential losses had it released the funds to Amaranth. It called the hedge fund’s lawsuit, filed in November, “baseless.”

But New York State Supreme Court Justice Richard Lowe ruled that the bank did “not conclusively establish a defense to the breach of contract claim as a matter of law.”

The judge dismissed the other five claims Amaranth had made against JPMorgan, including one alleging that top JPMorgan officials had engaged in rumor-mongering about Amaranth and unfair trade practices.