The American and British heirs of a consortium of Jewish art dealers filed suit last week against Germany and a German foundation seeking the return of a trove of medieval relics the dealers sold to the Nazis in 1935.
The plaintiffs’ complaint alleges that their ancestors parted with the items under duress and for substantially less than fair-market value.
The lawsuit, filed in U.S. District Court in Washington, D.C., is the latest move in a lengthy campaign by the heirs for return of the collection known as the “Welfenschatz,” or “Guelph Treasure” in English.
“It’s a challenging suit and we should expect a long and protracted fight. The plaintiffs certainly appear to have done their homework and asserted a number of compelling claims that could be successful,” said Joe Wielebinski, a shareholder in Dallas-based law firm Munsch Hardt Kopf & Harr, who represents victims of financial fraud, embezzlement and other white-collar crimes.
Wielebinski, who is not involved in the case, said it’s too early to predict the outcome. “The defendants are going to identify and assert a broad range of defenses, including possible challenges to the court’s jurisdiction, and will pursue them aggressively,” he said. “The plaintiffs appear to have anticipated some of these defenses.”
The objects at the heart of the dispute include gem- and pearl-studded silver and gold church artifacts, some of which are over 1,000 years old. The collection is currently worth an estimated $225 million to $275 million.
The Guelph Treasure was originally owned by several German aristocrats who sold the pieces to the Jewish art dealers in 1929. The dealers subsequently sold half the collection, then took the rest with them to Amsterdam when they fled the Nazis in 1934. The Nazis bought the remaining artifacts in 1935 for $2.5 million, according to an article published that year in The Baltimore Sun. The article said the treasures ended up under the control of Gestapo founder Hermann Göring, who presented them to Adolph Hitler as a “surprise gift.”
The sale price was only 35 percent of the real value of the works, according to the complaint. The heirs claim that the agreed sum was never fully paid and that their ancestors had no option but to sell, given the persecution and murder of the Jews by the Nazis.
“The choice they faced was clear: their property or their lives,” the complaint said.
The dispute differs from most claims for restitution involving artwork stolen by the Nazis in that there was a payment involved. Wielebinski said that the specific facts and circumstances surrounding the sale could be critical to determining the outcome of the matter, as the case involves a group of “sophisticated owners” who received some consideration for their property.
“One critical question will be, ‘Was the consideration fair?’ The plaintiffs’ position is, ‘Absolutely not. It was grossly inadequate.’ What makes this case a little unique is that something was paid for the artwork,” said Wielebinski, who is also the former executive director of London-based FraudNet, a global network of lawyers who fight financial crime and corruption and have handled numerous cases involving works of art.
The plaintiffs seek either a rescission of the sale and a return of the artwork or compensation that reflects the fair-market value at the time of the transaction.
Last year, Germany’s advisory organization on cases of suspected Nazi-looted art, the Limbach Commission, found that the 1935 sale was valid and that the price was fair. The commission decided the art would remain where it has been for some time–in the possession of a foundation operated by the German government, which has been displaying it in a Berlin museum since the early 1960s. As the determination was non-binding, the plaintiffs’ complaint said the commission’s decision does not bar them from pursuing their suit in the U.S. courts.
The German government designated the Guelph Treasure as a national cultural asset last week, about the time the suit was filed in the U.S. The declaration means that removal of the collection from Germany now requires the permission of the country’s minister for cultural affairs.
Wielebinski said he expects the Limbach Commission’s 2014 ruling and the German government’s recent decision to be serious points of contention.
At a 1998 meeting in Washington, D.C., the German government agreed to return artwork stolen by the Nazis to the legal owners or their heirs. Experts estimated that up to 50 famous works now in German museums might eventually be sent back to their rightful owners, according to a 2006 article in German weekly news magazine Der Spiegel. The article said that German diplomats attending meetings before the 1998 agreement was reached had warned in a telegram they sent home to Germany that about 110,000 items valued at $10 billion to $30 billion could ultimately be subject to claims for restitution.
A change in the existing terminology used by Germany to resolve restitution claims was implemented as a result of the Washington meeting, according to the Der Spiegel article. The new language expanded the options for restitution to include not only artwork confiscated by the Nazis, but pieces lost as a result of persecution or sold under duress, which could affect the outcome of the Guelph Treasure dispute.
