Otto Nathan Deutsch fled to Amsterdam, in late 1938 or early 1939, leaving his possessions, according to the heirs' lawyer, David Rowland of Rowland & Petroff in New York. Deutsch never got his belongings back. ``Blumengarten (Utenwarf)'' (``Flowergarden (Utenwarf)''), painted in 1917, surfaced in Switzerland in 1967 and was sold at auction to the Swedish museum, Rowland said. He estimates its value at $4 million.
The heirs first contacted the Moderna Museet in 2002. Though Rowland declined to identify them by name, he said the heirs include a Holocaust survivor who was on a train headed for Auschwitz in the last days of the war and was only saved by the Soviet army's advance into defeated Nazi Germany.
``We are still waiting for Sweden to return this looted art,'' Rowland said in a telephone interview from New York. ``What they are doing is not correct, and we are fed up.''
Sweden is one of 44 signatories to the 1998 Washington principles on Holocaust-era assets. Under that non-binding accord, nations agreed to achieve a ``just and fair solution'' with the prewar owners of art seized by the Nazis that was never returned.
The claim is the first of its kind in Sweden, said Marcus Hartmann, press secretary to Culture Minister Lena Adelsohn Liljeroth. The museum says it bought the painting with no suspicion that it was Nazi loot.
Maria Morberg, a spokeswoman for the Moderna Museet, said the museum and heirs disagree over what percentage of the painting's value the museum should receive.
``Their idea of a settlement is not our idea of a settlement,'' Rowland said. ``They want a profit from the painting, and we don't think that is right.''
The painting, one of about 35 Nolde works in the Moderna Museet's collection, shows a flowerbed blazing with luxuriant reds, oranges, blues and pinks. Born in 1867, Nolde was briefly a member of the group of German expressionists known as Die Bruecke. He was banned by the Nazis from exhibiting his work, but was rehabilitated in Germany after the war. He died in 1956.
When the lawyers first filed a claim to the Moderna Museet for the painting's return, the museum referred the decision to the government. The Swedish government determined in July 2007 that the museum must resolve the claim with the family.
``There are no legal grounds, either according to Swedish or Swiss law, for the return of the painting,'' Morberg said in an e- mailed reply to questions. ``The government's decision is based on the application of the principles of the Washington Conference. We have not objected to the return of the painting once there is an agreement on the conditions. The negotiations aren't stalled.''
Rowland argued that the museum is ``not negotiating in good faith.'' He said it rejected his offer to bring in a neutral third party to mediate and declined a recent request for a meeting.
``They said they were going to give it back, and they still haven't done it,'' he said. ``This is very frustrating for us. There is really no dispute that this is Nazi-looted art. The heirs are being very reasonable and we have offered to accept less than fair-market value for the painting. We even suggested they find sponsors to buy the painting for the museum. We also offered to pay them back for what they spent on it and more.''
Rowland has written to the Culture Ministry asking it to intervene in the negotiations to put pressure on the museum. Hartmann, the ministry spokesman, said he has seen the letter.
``This is an issue between the Moderna Museet and the heirs,'' Hartmann said. ``We have told the museum to settle it. We have given them a clear message.''
When Deutsch fled to Amsterdam, he arranged for his possessions, including two Nolde works and three or four more paintings, to be shipped to him there, Rowland said.
They never arrived and Deutsch died in penury of natural causes in Amsterdam in 1943. Informed by the shipping company that Deutsch's possessions had been bombed and destroyed in the war, the heirs accepted a ``small'' amount of damage compensation from Germany in 1962 for the loss, Rowland said.
Two paintings by Nolde that were among Deutsch's missing assets re-emerged at Galerie Roman Norbert Ketterer in Stuttgart, and were sold at auction in Lugano, Switzerland, Rowland said. The Swedish government bought ``Blumengarten (Utenwarf),'' while ``Mohn und Rosen'' (``Poppy and Roses'') was sold to a private buyer.
Pia Logermann at Ketterer Kunst GmbH in Munich, a successor to Ketterer's art dealership, said she could not immediately provide details on what happened to the painting between 1939 and 1967. ``We don't have access to the archive right now and it would take a lot of work to find the information,'' she said.