Egon Schiele Litigation

There was an interesting article by Jason Horowitz of the New York Observer this week discussing a lawsuit implicating an Egon Schiele drawing. The dispute involves a Schiele drawing which was owned by a Jewish singer and comedian, Fritz Grunbaum. The works were seized by the Nazis, though the work eventually ended up in the hands of the Nazis. The work at issue is,

a gouache-and-black-crayon drawing of a headless woman clutching her knee. It has meandered for decades through art galleries and private collections before ending up in the middle of a pitched legal battle in New York’s Southern District court, where two of Grünbaum’s heirs—Leon Fischer, a New York stamp dealer, and Milos Vavra, who lives in Prague—have bickered for two years with the drawing’s owner, David Bakalar.

Now, a key Swiss gallery owner is prepared to give a deposition for the first time about the drawing’s provenance, and the presiding judge has expressed his eagerness to resolve the case.

At the same time, the heirs’ New York lawyer, Ray Dowd, is weighing the potentially momentous step of going after the Viennese company Schenker & Co. A.G.

Schenker’s global network of shipping firms amounts to one of the world’s largest logistics companies, with more than 40,000 employees in dozens of countries and more than $10 billion in turnover a year. Mr. Dowd contends that the company, which serves as the Olympic Games’ official movers, stole the drawing and set in motion a litany of fictitious provenances that skip from Vienna to Brussels, from Bern to New York.

The whole factual background is quite detailed, and too intricate to delve into here. The attempt to implicate the wing of the American Schenker Corporation seems quite difficult, especially as it was not formed until 1947.

Though there have certainly been some very positive results in Nazi restitution cases, Picasso's Femme en Blanc is one example, not all the litigation in this area has produced positive results. Consider the case of another Schiele work, Portrait of Wally (pictured above) which was seized in a civil forfeiture action by federal prosecutors. I'm currently looking at this case for an article I am preparing. Based upon my initial research, it appears as if the work is still locked in storage at the Museum of Modern art. If anyone has any information on the present disposition of the dispute, I would really like to talk about it.

Here is my present understanding of the case. Nearly nine years on, the Portrait of Wally litigation has still not managed to reach the substantive issues of the case, and the work remains in storage in the New York Museum of Modern Art in a tragic echo of the fictional Jarnydyce v. Jarndyce in Charles Dickens’ Bleak House.

At present, a new trial will likely ensue to determine if the painting was stolen under the relevant Austrian law. Some time before 1938, Egon Schiele’s Portrait of Wally was housed in the apartment of a Jewish gallery owner, Lea Bondi Jaray “Bondi”. In April 1938, Friedrich Welz acquired the gallery belonging to Bondi in a process called “aryanization”, in which Jews were forced to sell their property at extremely low prices. Welz was later interned by the US military on suspicion of war crimes, at which point it confiscated his possessions, including the Portrait of Wally. Then, as per its post-war military policy, the military returned the property to the government of Austria, not the individuals to whom the property may have belonged prior to its seizure.

The work then was then mistakenly included in a shipment to another dispossessed family. Bondi, who had since fled to London, then allegedly enlisted Dr. Rudolph Leopold to recover the work from the Belvedere Gallery, the purchaser of the work. Later, Leopold acquired Portrait of Wally for himself from the Belvedere, without Bondi’s knowledge. After later learning of Leopold’s possession of the work, Bondi hired an Austrian attorney, but she was unable to recover the work before her death in 1969. Leopold then sold the work to the Leopold, the museum in which he serves as the Director for life.

The dispute remained dormant until 1997, when the Leopold Museum-Privatstiftung (Leopold) presented the work to the New York Museum of Modern Art (MoMA) for a temporary exhibition. After the exhibition, the Manhattan District Attorney’s Office subpoenaed the painting. That subpoena was quashed initially by the New York Court of Appeals because it violated New York’s anti-seizure statute. That same day a Federal Magistrate Judge issued a seizure warrant for the work based on probable cause that Dr. Leopold, had violated the NSPA. The painting has been in storage since the beginning of the dispute in 1998, while the value of the “Portrait of Wally” has soared to between $5 and $10 million.

Many argue this dispute has had a chilling effect on international art loans. As art adviser Ashton Hawkins says,

I think that people who would have previously considered lending now simply don’t consider it…I know from my colleagues who arrange these exhibitions in New York and in other cities that lending to the United States and particularly to New York has been more of a problem than it used to be.

Glenn Lowry, the director of the MoMA had a similar view testifying before the House Committee on Banking and Financial Services in 2000, “[Portrait of Wally] had been exhibited around the world for decades and … had been reproduced frequently in books.”

The case stands as a cautionary tale of what can happen if we extend restitution litigation too far. The clear cases of theft and loss are easily handled. But when you talk about a series of owners, some with varying degrees of knowledge and bona fides, I think there is a very grave risk of injustice being done. After all, this kind of litigation has three victims: the original owner, the present good faith possessor, and the public who may not be able to have access to the work. If anyone has any information about where this Portrait of Wally litigation currently stands, I would be delighted to hear it.

(Correction: earlier today I incorrectly labelled the publication as the NY Sun, rather than the actual publication, The New York Observer. I've corrected my error.)