CASES AND RECOVERY EXPERIENCE

United States: Mendelssohn Heirs Claim for Picassos from MOMA and the Guggenheim

The Museum of Modern Art and the Solomon R. Guggenheim Foundation brought a lawsuit in 2008 in U.S. District Court in New York to determine the ownership of two Picasso paintings in the Museums and claimed by the heirs of Paul von Mendelssohn-Bartholdy. Preparatory to trial, U.S. District Judge Jed S. Rakoff ruled that German law applied to a transfer of art made in Germany in the 1930s, as was the case with these two paintings, and that it was for a jury to decide whether the transfer was void under German law because of duress imposed by the Nazi regime. He also ruled that the Museums might not be able to use a defense they raised that the heirs’ inaction was an unreasonable delay because the Museums may have been on notice when they acquired the paintings, that the art had been misappropriated.

The result of the trial had been expected to have great significance in so-called "forced sale" cases involving transfers of art in Germany in the 1930s because of Nazi or German government pressure, direct and indirect. However, an out-of-court settlement on the eve of the trial precluded any precedent-setting outcome.

We post here several documents in the case including the transcript of the February 2, 2009 settlement conference before the judge in which the parties discussed the settlement reached by the parties. Soon after, on March 23, Judge Rakoff issued a Memorandum Order concerning the parties’ confidentiality agreement to keep secret the terms of settlement. This has been covered by The New York Times and by Bloomberg News.