[CPProt.net] Sotheby's, Bakalar Entangled in Dispute Over Nazi-Era Artworks

[MSN CPPnet]

Sotheby's, Bakalar Entangled in Dispute Over Nazi-Era Artworks 

June 6 (Bloomberg) -- What started out as a battle over a 1917 watercolor by
Austrian Expressionist Egon Schiele has escalated into a legal tug-of-war
over artwork that may be worth more than $100 million. 

The dispute involves Sotheby's Holdings Inc., the world's largest auction
house, Boston philanthropist David Bakalar, several prominent art dealers,
and the heirs of a popular Viennese cabaret singer who died in a Nazi
concentration camp. 

The legal tussle started on March 21 when Bakalar filed a complaint in New
York federal court against Leon Fischer and Milos Vavra, who claim to be the
heirs of singer Fritz Grunbaum. 

Bakalar, 80, contends that Fischer and Vavra sabotaged his effort to sell
the 1917 Schiele watercolor by claiming they were the rightful owners of
``Seated Woman with Bent Left Leg (Torso),'' an erotic picture of a headless
woman brushed on paper with opaque paint. 

Bakalar, founder of Transitron Electronic Corp., sold the artwork for
400,000 pounds ($726,000) on Feb. 10 at a Sotheby's auction in London.
Sotheby's later voided the sale and told Bakalar it would hold the piece
until the ownership issue was decided. 

``Because of the defendants' reckless and inaccurate last- minute claims,
plaintiff has been substantially harmed,'' Bakalar's lawyers say in the
complaint, which asks the court to declare that Bakalar is the rightful
owner of the watercolor and award him an unspecified amount in damages. 

Nazi Inventory 

Last Wednesday, Fischer and Vavra filed a counterclaim in federal court in
New York, saying they should gain possession of all artworks that once
belonged to Grunbaum. The request is based on an inventory of Grunbaum's
collection made by the Nazis in 1938, when he was sent to a concentration
camp and his collection was placed in a warehouse. 

Fischer and Vavra say those works, including 55 large, colored drawings and
five oil paintings by Schiele, are now scattered in public and private
collections throughout the world, such as the Leopold Foundation in Vienna,
the Art Institute of Chicago and the Museum of Modern Art in New York. 

Forced Sale? 

In their counterclaim, Fischer and Vavra say the ``art was either stolen
from Grunbaum's estate or the subject of an illegal `forced sale' and that
no subsequent transfer was valid, legal or made in good faith.'' 

Fischer, a 64-year-old New York stamp dealer, and Vavra, who lives in
Prague, say that Sotheby's knew before the sale that questions had been
raised about ownership of the watercolor. They cite a Feb. 7 letter to
Sotheby's from Erika Jakubovits, executive director of the Jewish Community
Organization of Vienna, in which she asks that the work be withdrawn from
the auction because of doubts about its proper owner. 

``We reviewed with Ms. Jakubovits the research we had done and the reasons
why we felt comfortable offering the work for sale,'' John Olsoff, Sotheby's
North American general counsel, said in an interview. 

Fischer and Vavra also say that two days after the sale, they notified
Sotheby's that the Austrian government ruled in 2002 that they were
Grunbaum's rightful heirs. (Fischer's grandfather was the brother of
Grunbaum's widow, and Vavra is a descendant of Grunbaum's sister, Elise.
Court documents don't mention Vavra's age or occupation.) 

`Speculative' Claim 

Their counterclaim also calls Bakalar's suit ``a frivolous legal
proceeding'' filed ``without the most minimal factual inquiry.'' 

Attorney James A. Janowitz, who is representing Bakalar, said the claims
made by Fischer and Vavra are ``speculative'' and that his client wants to
``have any cloud'' over his ownership removed. When Bakalar bought the
Schiele watercolor in 1963 from New York's Galerie St. Etienne, similar
works were selling for $1,200 to $3,000, according to Jane Kallir,
granddaughter of the gallery's owner. 

``This is not about the Holocaust,'' Bakalar's complaint says. ``It is about
a voluntary sale by a close relative of Fritz Grunbaum, which occurred years
after the war and which remained unchallenged for decades.'' 

Janowitz said Bakalar, who was president of Transitron Electronic for 30
years, wasn't available to comment. Bakalar retired 20 years ago to devote
himself to philanthropy and has endowed art galleries at Massachusetts
Institute of Technology, Wellesley College and the Massachusetts College of
Art. 

Times Reporter 

While no official value has been placed on the Schiele collection, art
dealer Andrea Crane of New York's Jan Krugier Gallery estimated that the
works are worth more than $100 million. 

``The market for Schiele is stronger than ever, and judging from the piece
which sold at Sotheby's London, it's not hard to figure out the potential
value of the collection,'' Crane, who has sold many German and Austrian
artworks, said in an interview. 

This is not the first controversy over artworks that once belonged to
Grunbaum. 

In 1998, then-New York Times writer Rita Reif and her sister Kathleen
claimed ownership of ``Dead City III,'' a 1911 Schiele painting that was
loaned by the Viennese Leopold Foundation to the Museum of Modern Art.
Because both sisters had married relatives of Grunbaum, they contended they
were among the heirs to the collection. 

Death in Dachau 

Although the New York district attorney's office issued a subpoena
preventing MoMA from returning ``Dead City III'' to the Viennese foundation,
a New York appeals court later ruled that the painting could be returned
under a law that prevents seizure of artworks. 

The outcome of Bakalar's complaint and the counterclaim by Fischer and Vavra
hinges on what happened to Grunbaum's collection after he was sent to Dachau
in 1938. Grunbaum died there in 1941 and his wife, Elisabeth Grunbaum-Herzl,
died in another concentration camp the following year. 

The Grunbaum collection didn't surface again until the 1950s, when many of
the works were exhibited by the Swiss gallery Klipstein & Kornfeld and then
sold to art dealer Otto Kallir for 650 francs. Kallir died in 1978. 

In their court filing, Fischer and Vavra accuse Kallir's granddaughter,
Jane, of concealing the stolen history of the Grunbaum collection when she
wrote a comprehensive catalog on Schiele's works in 1990. 

Stolen Art 

Jane Kallir, who now runs the family gallery on 57th Street, said in an
interview that she didn't know at the time that the Schiele works were once
owned by Grunbaum. She also said her gallery has helped families recover
artworks that were stolen by the Nazis. 

``Decades after the fact, it is almost impossible to document what
happened,'' she said. ``This should have been done years ago. All the people
who really knew about these pictures are dead.'' 

The counterclaim by Fischer and Vavra also contains accusations against
Eberhardt Kornfeld, who was a junior partner at the Swiss gallery when it
sold the artworks to Kallir in 1956. 

In a letter included in court papers, Kornfeld says he bought the artwork
from Mathilde Lukacs, a sister-in-law of Fritz Grunbaum. Lawyers for Fischer
and Vavra say in court documents that Kornfeld's account is ``fabricated''
and ``patently incredible'' because Lukacs wouldn't have had access to the
storage facility where the works were kept. 

Kornfeld is now 82 and living in Switzerland, according to his son-in-law,
Wolf Weiler, who declined to comment on the case. 

Better Salad 

After German courts ruled in 1998 that the Reif sisters weren't entitled to
the Grunbaum collection, Germany's Hoerner Bank AG launched a campaign to
find the rightful heirs. Viennese genealogist Herbert Gruber and Dennis
Langel, a Long Island-based private detective, helped the bank track down
Fischer and Vavra. 

In 1999, Fischer received a letter from Langel with information about his
family ties to Grunbaum. Although the letter suggested he might be entitled
to some money, Fischer said he was ``suspicious'' and ignored it. Langel
persisted, though, and eventually convinced Fischer to meet with him at a
lawyer's office, where he learned more details. 

``I only know vaguely that relatives in Austria had met a bad fate,''
Fischer said in an interview. ``That's all I knew until six years ago.'' 

Fischer said he's not banking on a windfall from the case. 

``The wheels of justice move very slowly,'' he said as he ate a salad at a
diner on the Upper East Side. ``Win or lose, not much is going to change. I
may get a better apartment or have more money, but I doubt I'll be able to
get a better Cobb salad.'' 

The case is Bakalar v. Vavra and Fischer, No. 05 CIV. 3037, U.S. District
Court for the Southern District of New York. 

Last Updated: June 6, 2005 00:09 EDT