The three-judge lower court said that while it was not ruling on whether or not the Wildensteins collaborated with the enemy, it rejected their charge that the writer, Hector Feliciano, acted with ''serious and flagrant scorn for searching for the truth'' in suggesting commercial ties between Georges Wildenstein, then the head of the family business, and some Nazi art dealers.
Referring to historical documents that Mr. Feliciano used in preparing his book, ''The Lost Museum: the Nazi Conspiracy to Steal the World's Greatest Works of Art,'' as well as new documents presented to the court, the judges said that ''Hector Feliciano had in his hands elements that permitted him to believe that Georges Wildenstein maintained direct and indirect relations with German authorities during the occupation.''
The ruling, which the Wildensteins said they would appeal, is a blow to their campaign to clear their name after a wave of bad publicity. The suit -- brought by Georges's son, Daniel, 81, and his grandsons, Alec and Guy, and the New York-based Wildenstein & Company -- said that, as a result of Mr. Feliciano's book, they had suffered ''considerable commercial damage'' and that some Jewish clients had stopped visiting the Wildenstein gallery on East 64th Street in Manhattan.
Last month the Wildensteins won a defamation suit against the French weekly magazine VSD. In an article last year about a messy divorce involving Alec Wildenstein, the magazine said, among other things, that the family ''was suspected of building its fortune through collaboration with the Nazis.'' In that ruling, the court said the documents presented by the magazine to support the article did not ''sustain the thesis of collaboration.''
In a statement today, Daniel Wildenstein said that today's ruling was ''diametrically opposed'' to the decision in the VSD case and that, in an appeal, his family would demonstrate that Mr. Feliciano's book contains ''flagrant historical errors that have distorted reality through an erroneous presentation of the facts.'' A spokeswoman for the family said Mr. Wildenstein was ''shocked'' by today's verdict.
The Wildensteins brought the court case against Mr. Feliciano in France because ''The Lost Museum'' was first published here in 1995 as ''Le Musee Disparu.'' It was published in the United States in 1997. Because Georges Wildenstein died in 1963 and libel suits cannot be brought against the dead in France, the case was brought under the Civil Code, which allows for damages to be sought when an author is unprofessional or irresponsible.
As it happens, Mr. Feliciano's book touched only briefly on the Wildensteins. It provoked intense debate in France, however, because it drew public attention here to artworks that had been recovered by France after being seized by the Nazis but had not been returned to their rightful owners.
In his references to Georges Wildenstein, Mr. Feliciano said that the powerful dealer and collector did business with Nazi art dealers before the war and for months after France's occupation by Germany in June 1940. He also said that after Wildenstein went into exile in New York in January 1941, he maintained contacts with a former employee, Roger Duquoy, who ran the Paris gallery until 1944.
In a telephone interview from New York, Mr. Feliciano said he felt fully vindicated by today's ruling. ''They lost,'' he said. ''The Wildensteins bet that a French court would rule in their favor, but the French court was totally objective in looking at the evidence. It went to the heart of the matter. Not a single one of the Wildensteins' arguments was accepted.''
Mr. Feliciano, who lived in France for 15 years before recently returning to the United States, said that because of the suit, he had made documents available incriminating Georges Wildenstein that had not previously been published. ''With this decision, many researchers and journalists will also be able to publish a lot of fresh information about the Wildensteins,'' he said.
In its 14-page ruling today, the French court analyzed in detail the disputed references to Georges Wildenstein in ''The Lost Museum'' as well as the documents presented by Mr. Feliciano. Among these are pre-war letters between Wildenstein and a Nazi art dealer, Karl Haberstock, which, the court said, ''confirm the idea formulated by the author that 'the Wildensteins had contacts with the Nazis.' ''
The court also refers to letters between the exiled Wildenstein and Mr. Duquoy. According to the court, these letters ''indicate the continuation of commercial relations between the two men after the Liberation and lead to the belief that they were not interrupted by the war.''
The three judges further rejected several documents presented by the Wildensteins to support their case, including one in which Mr. Duquoy writes to the Nazi authorities claiming his independence from ''the Jewish firm Wildenstein.'' The judges said this claim ''lacked all credibility given the personality of the sender and his notorious links with the Nazi occupiers.''