PIPE Equity Partners is suing Highmount Olympic Fund in a dispute over the valuation of an interest in a fund managed by beleaguered private placement investor NIR Group.

New York-based Highmount invested in PIPE Equity in 2009 by trading an interest in AJW Qualified Partners II, a fund managed by NIR. PIPE Equity now claims that the AJW interest did not live up to its initial valuation of $4.6 million.

The suit was filed Tuesday in New York State Supreme Court.

Funds managed by Roslyn, N.Y.-based NIR have invested at least $215.9 million in 131 private placements since 2001.

New York-based PIPE Equity, which is managed by Hull Capital Management, said in court documents that the $4.6 million provisional value of the interest it received in the AJW fund was supposed to be subject to an eventual third-party audit for 2008.

That audit never took place and probably never will, PIPE Equity claims. PIPE Equity alleges that the value of the fund was fraudulently inflated by AJW.

PIPE Equity bases its claim on reports in Forbes magazine last year that the U.S. Justice Department is looking into possible improprieties in the valuation claims made by NIR. PIPE Equity said it wrote down its valuation of its interest in the AJW fund because of those reports.

PIPE Equity said that it then wrote down the holding even further after learning that former NIR analyst Daryl Dworkin pleaded guilty earlier this month to criminal charges of lying to NIR investors and taking kickbacks from private placement finders.

Highmount has not responded to the complaint yet, but PIPE Equity says Highmount argues that it is not obligated to restate the value of the AJW interest absent an external review of the portfolio.

Two previous redemption-related suits by disgruntled NIR investors were settled out of court.

Attorneys for the PIPE Equity fund, Highmount, and NIR did not respond to requests for comment.