A Tennessee court has ordered Finish Line to close the $1.5 billion acquisition of shoe and hat retailer Genesco, sending Genesco shares up 16 percent.
Finish Line, whose stock fell as much as 22 percent, has been trying to walk away from its June agreement to buy Genesco.
Genesco said the court ruled that Finish Line had breached their merger agreement.
"We look forward to working with The Finish Line to consummate the merger expeditiously," Genesco Chief Executive Hal Pennington said in a statement.
Swiss bank UBS sued both companies last month in federal court in New York in a bid to be relieved of its obligation to fund the deal.
Genesco, meanwhile, separately sued Finish Line and UBS in Tennessee in an attempt to force completion of the agreement. Finish Line said Thursday that it was disappointed with a court ruling that a New York court would determine whether the merged company would be insolvent.
If the court concludes that the merged company would be insolvent, the deal will be halted, Finish Line said, adding that it was considering its options, including an appeal.
Shares of Genesco were up $4.92 to $37.98 in early trading on the New York Stock Exchange, while Finish Line was down 57 cents to $2.48 on the Nasdaq.