Meredith Whitney won an early victory in the fight to save her hedge fund as a judge said investor payments can resume while billionaire Michael Platt seeks to recoup his stake.

Platt’s BlueCrest Capital Opportunities Ltd., the biggest investor in Whitney’s hedge fund, is suingWhitney, saying she refused an October request to return its investment, now worth $46 million. Whitney’s American Revival Fund slid 11 percent last year through November while the S&P 500 rose almost 12 percent. Platt in 2013 helped Whitney start her firm, Kenbelle Capital, by investing $50 million.

New York State Supreme Court Justice Jeffrey K. Oing on Wednesday lifted a ban he imposed two days earlier blocking Whitney’s fund from paying investors. After a hearing, he also denied a bid to order Whitney’s firm to honor Platt’s redemption request pending the outcome of the suit. He said BlueCrest acknowledged in transaction papers it can afford to lose its investment and that granting the request would essentially shutter the fund.

“I’m not quite convinced that there’s a redemption right that’s ripe at the moment,” Oing said. “Essentially I would be causing a run on the bank.”

The court hearing was the second in a lawsuit filed just last week, after an earlier case was brought in Bermuda. Whitney, 45, shot to fame as a banking analyst after warning in 2007 that Citigroup Inc. would have to cut its dividend, months before most saw the financial crisis coming.

‘Seed Money’

Whitney has argued in court papers that the lawsuit is a “blatant attempt” to dissolve her fund and the stake was “seed money” that can’t be redeemed for two years under agreements between the two parties. BlueCrest says it can ask for its investment at any time.

“We have the right to redeem,” Corey Worcester, a BlueCrest attorney, said in court. “We just do. With no lockup period.”

Worcester declined to say after the hearing whether BlueCrest would appeal. Stanley Arkin, Whitney’s lawyer, said such an attempt would be “feckless.”

“We won hands down in every respect,” Arkin said in a phone interview.