In 2018, a New York court ruled that two Egon Schiele paintings had been looted by the Nazis and the heirs of the original owner were the rightful owners of the works. The two works in question, Woman in a Black Pinafore (1911) and Woman Hiding Her Face (1912), were purchased by Fritz Grunbaum in the 1920s. In 1938 he was arrested by the Nazis and sent to Dachau where he subsequently died. The Nazis confiscated his art collection, numbering some 449 pieces, including the two Schieles.
The two works came to light when they were offered for sale by London art dealer Richard Nagy at an art show in Manhattan. The heirs sued for restitution for the paintings and the court ruled in their favor, ordering that Nagy turn over the paintings to the heirs. However, Nagy continued to litigate the case despite the clear finding that these works were stolen. Under New York law, a person who holds an item of property that does not belong to them and prevents the owner from “possession or enjoyment” of the property is liable for interest at a rate of 9% for each year the owner is denied possession. The interest is based on the value of the property, and in this case the interest is valued at approximately $1.4 million.
Calling this a “monumental sea change,” the plaintiff’s attorney Raymond Dowd said that, “[a]n art dealer or museum refusing to stop [appealing or litigating] now has a meaningful financial downside[.]” Nagy, through his lawyers, says that he will appeal this decision.
Awarding a plaintiff interest in a Nazi era provenance case will certainly having defendants thinking twice about holding onto works once the court has ruled that the works were stolen and must be returned to the rightful owners. And, just perhaps, this ruling will serve as an incentive to negotiate a return instead of forcing heirs to institute a lawsuit.