"Portrait of Wally" Freed: $19-Million Settlement to Nazi Victim’s Heirs

Egon Schiele, "Portrait of Wally," 1912

It's getting to be a familiar scenario: After years of legal wrangling, a cultural-property dispute gets settled in favor of the claimants, right on the brink of the trial date.

It happened last year, when the Museum of Modern Art and the Guggenheim Museum settled with the heirs of Paul and Elsa von Mendelssohn-Bartholdy, the Nazi-era owners of two major Picassos---MoMA's "Boy Leading a Horse" and the Guggenheim's "Le Moulin de la Galette."

And now Herrick, Feinstein, a preeminent law firm in restitution cases, has just dropped this breaking news in my inbox:

The Estate of Lea Bondi Jaray (the "Estate") announced today that the United States Government, the Estate and the Leopold Museum Privat-Stiftung (the "Leopold Museum") have agreed to settle the long-pending case of " United States of America v. Portrait of Wally," which was about to go to trial before Chief Judge Loretta Preska in federal court in Manhattan on July 26, 2010.

The law firm's complete announcement of the settlement is here.

Unlike the MoMA/Guggenheim case, the terms of the Leopold settlement have been publicly disclosed: According to the law firm's announcement, the Leopold Museum will pay $19 million to the estate of the woman from whom the painting was said to have been confiscated by the Nazis. Before the painting returns to the Leopold Museum, it will be exhibited again in New York, "at the Museum of Jewish Heritage---A Living Memorial to the Holocaust, ...beginning with a ceremony commemorating the legacy of Lea Bondi Jaray and the...resolution of the lawsuit," according to the announcement.

This 1912 Schiele painting has been hidden away in storage for more than a decade, while the case dragged on. As I wrote for the Wall Street Journal, back in 1999:

If there were habeas corpus for paintings, "Portrait of Wally" would have been released by now.

"Wally" has been in legal limbo ever since the Museum of Modern Art borrowed it from the collection of Viennese ophthalmologist Rudolf Leopold for an exhibition in 1997. (The case outlived Leopold, who died last month.) If nothing else, American museums have learned from this dispute the necessity of applying for federal immunity-from-seizure protection for international loans.

My ArtsJournal blogging colleague Judith Dobrzynski owns this story. I expect that she'll have more to say.