N.Y. museums keep Nazi-looted Picassos in claim settlement

Reuters 2 February 2009

The Museum of Modern Art and the Guggenheim will hold onto two Picasso paintings after reaching a settlement with a Jewish German scholar who claimed he was the rightful owner of the art.

Lawyers for Julius Schoeps and the museums told a Manhattan federal judge on Monday the dispute over ownership of "Boy Leading a Horse" and "Le Moulin de la Galette" had been settled. A trial was due to start on Monday.

In 2007, MoMA and the Solomon R. Guggenheim Foundation sued Schoeps, who claimed he was the heir of art collector and banker Paul Robert Ernst von Mendelssohn-Bartholdy. Schoeps contended the banker, his great uncle, was forced to relinquish the paintings in Nazi Germany.

"There will be complete peace between the museums and the Mendelssohn-Bartholdy and other heirs," Gregory Joseph, a lawyer for the museums, told the court, adding the settlement's "dollar amount" would remain confidential. "The paintings will remain in the museums."

In an unusual reprimand, U.S. District Judge Jed Rakoff strongly urged both sides to release terms of the settlement saying the heirs invoked "the weight of history on their behalf," and it would be "extraordinarily unfortunate that the public would be left without knowing what the truth is."

He gave both sides 30 days to explain why the settlement should remain confidential.

The paintings, believed to be worth millions of dollars, have been attractions at both museums. "Le Moulin de la Galette" - also the name of a famous Renoir - was painted in 1900 and "Boy Leading a Horse" was painted six years later.

In the past, courts have ordered the return of Nazi-looted art to the heirs of former Jewish owners.

Schoeps, who was not in court on Monday, claimed von Mendelssohn-Bartholdy was pressured under Nazi Germany to get rid of the paintings sometime before his death in 1935. Other heirs later joined the case. The museums disputed those claims.

The painting were passed to Justin Thannhauser, a leading German Jewish art dealer and von Mendelssohn-Bartholdy business associate. Thannhauser sold "Boy Leading a Horse" in 1936 to former MoMA Chairman William Paley, who gave it to the museum in 1964. "Le Moulin de la Galette" was transferred to the Guggenheim by Thannhauser in 1963.
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