[Judgment] on a long-running lawsuit in New York which helped launch a world outcry over Nazi-looted art at museums and prompted many institutions to begin examining their collections for history of Nazi theft, has been postponed to let the US government review new evidence. On 3 June the schedule was suspended on a case brought by the US government in 1999 to seek confiscation of Egon Schiele's Portrait of Wally from the Leopold Museum in Vienna, under the US National Stolen Property Act. The US says the Leopold knew that the art was stolen by a Nazi in 1939 from its Jewish owner, Lea Bondi. The case, which the parties had asked the court to resolve without a trial, is before the federal district court in Manhattan.
It's true that the Portrait of Wally dispute has probably caused some museums to re-examine their collections, but its also been pointed to as a risk to art loans and traveling exhibitions. It also puts a lot of power in the hands of prosecutors when they can use a forfeiture proceeding like this, as the government essentially brings suit against the object itself, with the benefit of far lower burdens of proof. Historically, federal prosecutors have intervened on behalf of source nations or claimants when they have potential claims. It's a very useful thing for claimants to get this kind of assistance in these cases. I'm very interested to know what new information may be coming to light.
My understanding of the facts in this case indicates its a difficult case for the prosecutors to prevail. Hopefully a resolution is pending, as the work has been in storage for nearly a decade now.