Lawyers for Martha Stewart lost a bid to dismiss a Macy's lawsuit on Thursday, in New York State Supreme Court.

The lawsuit claims Stewart's company Martha Stewart Living Omnimedia violated their exclusive contract with Macy's, agreed to run until 2018, by designing home wares for J.C. Penney Co under the name "Everyday," Reuters reports.

New York State Supreme Court Justice Jeffrey Oing will rule Friday on whether to temporarily block J.C Penney from selling Martha Stewart-designed goods.

The ruling means J.C. Penny loses the right to sell an estimated $100 million of Martha Stewart merchandise that has already been produced.

Justice Oing pleaded with lawyers from the opposing parties to work out a settlement out of court.

"This is a business deal that you should not have courts getting involved in," he said. "It's getting to a point where the clock can't be turned back. The ship is ready to sail."

Macy's sued J.C. Penney and Martha Stewart Living Omnimedia, after the two companies reported they were planning on opening "Martha Stewart" stores at J.C. Penney locations, back in 2011.

If J.C. Penney loses the Martha Stewart lawsuit, it would deal a formidable blow to the department store, which is currently seeking $1 billion in cash to cover recent losses.

The company has brought in financial advisers from Blackstone Group over the last several months to provide "expertise about how to best position the company from a financial standpoint during the transformation," a company spokeswoman said.