A federal bankruptcy judge in Florida recently ruled that a lawsuit against General Electric Capital Corporation (GECC) may proceed, as there is sufficient evidence to support investors’ claims that the company knew of former Minnesota businessman Tom Petters’ Ponzi scheme.

The liquidating trustee for two hedge funds that claim to have lost more than $1 billion in the $3.65 billion fraud scheme sued GECC in 2012, accusing GECC of aiding and abetting fraud and of fraudulent concealment, among other things.

Petters allegedly took out a $50 million loan from GECC, a commercial lender. And the lawsuit claims that GECC and Petters developed an “unusually close relationship,” evidenced in part by a profit-sharing arrangement and the company’s overlooking of Petters’ noncompliance with the loan agreement, among other things, according to court documents.

The suit claims that GECC uncovered Petters’ fraud scheme in 2000 when it came into contact with Costco, a retailer with whom Petters was purportedly conducting business. Costco said it wasn’t doing business with Petters, and GECC kept its knowledge under wraps, according to the lawsuit.

GECC, in turn, had asked the court to dismiss the investors’ lawsuit.

According to court documents filed late last week, the Florida judge dismissed several counts alleged in the lawsuit but said that the allegation of civil conspiracy to commit fraud may proceed. (The Wall Street Journal made the judge’s order available online here.)

To read additional details about the history between GECC and Petters in Forbes, click here. Forbes pointed out that GECC’s position in the legal dispute has been that it had no duty to, or relationship with, the Palm Beach investment funds that would require it to share information about the fraudulent disclosures made by Petters.

The suit against GECC illustrates the far-reaching and drawn-out fallout of the Petters fraud scheme, which was uncovered in 2008. Last year, General Electric agreed to pay $19 million to settle a “clawback” lawsuit filed by bankruptcy trustee Doug Kelley. Such suits were filed in an attempt to recover so-called “false profits” from investors and others who benefitted from Petters’ fraud scheme. In its settlement, General Electric reportedly denied “any and all liability.”

Meanwhile, Petters, who was sentenced in 2010 to 50 years in prison, is currently requesting a new, more lenient sentence. Petters claims that his former attorney did not inform him of a pretrial offer from prosecutors to cap his punishment at 30 years in exchange for a guilty plea. Federal prosecutors denied those claims, but Petters plans to travel to Minnesota in October from the Leavenworth, Kansas prison where he is currently serving his sentence, in order to make his argument for a lesser punishment.