Nazi-Looted Art Ordered Returned to Holocaust Victim’s Heirs

(Bloomberg) -- A New York judge awarded two Nazi-looted paintings to the heirs of an Austrian-Jewish Holocaust victim whose collection of hundreds of pieces of art was systematically stolen by Hitler's army in 1938.

A U.K art dealer claimed that the two paintings in his possession -- Egon Schiele's “Woman in a Black Pinafore” and “Woman Hiding her Face” -- couldn't be seized under the Holocaust Expropriated Art Recovery Act signed into law by former President Barack Obama in 2016. Justice Charles E. Ramos in Manhattan on Thursday rejected the argument.

“Although defendants argue that the HEAR Act is inapplicable, this argument is absurd, as the act is intended to apply to cases precisely like this one, where Nazi-looted art is at issue,” Ramos said in the decision.

The judge ordered the works be transferred to the heirs of Fritz Grunbaum. He was a songwriter, director and actor who openly mocked Hitler and performed musicals and plays for his fellow prisoners in the Dachau concentration camp, their attorney, Raymond Dowd, said in a statement. Grunbaum died in captivity in 1941.

Grunbaum's collection of 450 pieces, 80 of which were works by Schiele, was looted by Nazi agents in 1938, after soldiers forced him to sign the rights over to his wife, who was also later murdered. That act undermined any future claim of ownership, the judge said.

"A signature at gunpoint cannot lead to a valid conveyance," Ramos said.

NY Lawmaker Pushes Bill to Allow Seizure of Stolen Art on Loan

The art dealer, Richard Nagy, argued Grunbaum never owned the disputed paintings. Instead, he claims they were owned by Grunbaum's sister-in-law, who sold the works and more than 50 others to a Swiss gallery that advertised them in 1956, according to the ruling. Ramos rejected that argument.

"There is no triable issue of fact as to whether the artworks belonged to Mr. Grunbaum before World War II," the judge said. "Even the gallery on which the defendants rely as the source of their provenance has confirmed that Mr. Grunbaum had owned the works."

Grunbaum's collection captured international attention in 1998 when former New York District Attorney Robert Morgenthau seized Schiele's “Dead City” from New York's Museum of Modern Art, according to the statement. The seizure encouraged Austria and other European nations to process claims involving art looted from Holocaust victims, it said.

Nagy's acquisition and ownership of the Schiele works was transparent and well-documented, according to a statement issued Friday by Nina Hartl, the director of London-based Richard Nagy Ltd.

Appeal Planned

"As an art dealer with a long record of working with German Expressionist artworks, and someone whose own family had to flee persecution, Richard is particularly sensitive to restitution claims and continues to believe that all such claims call for close and merit-based review," Hartl said. The decision will be appealed, she said.

The two Schiele paintings in question have been housed in a fine art storage facility in Queens, New York, since the suit was filed 2015. The lawsuit was filed when Dowd requested the artworks be returned to Grunbaum's heirs after they were found in Nagy's booth at an art fair on Park Avenue in Manhattan, according to the statement.

“It is a victory for Holocaust victims, their families and all those who fought and died to undo the evils of Nazism,” Dowd, from Dunnington, Bartholow & Miller LLP, said in the statement. "This decision brought us a step closer to recovering all of the culture that was stolen during the largest mass-theft in history.”

The case is Reif v. Nagy, 161799/2015, New York state Supreme Court (Manhattan).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net.

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider

©2018 Bloomberg L.P.