U.S. Court Asked to Act Against Germany in Nazi Art Acquisition Now Valued at $250 Million

WASHINGTON, Feb. 24, 2015 /PRNewswire/ -- American and British descendants of Jews who escaped from Nazi Germany, and whose joint art collection included precious medieval works worth an estimated $250-300 million today, have asked the United States District Court for the District of Columbia to restitute that collection from Germany and from the current possessor of the collection, Germany's Prussian Cultural Heritage Foundation (SPK).

This is the first time U.S. Courts have been asked to intervene in Germany's refusal to recognize the claimants' ownership of these works, known as The Guelph Treasure, which were stolen in what the claimants say was a "sham transaction" forced upon their predecessors in 1935. 

The Prussian Cultural Heritage Foundation's refusal to recognize these restitution claims followed a March 20, 2014 opinion by a German government advisory commission that had no binding authority. The decisions of that advisory board have shown, according to today's complaint, a disturbing tendency in recent years to ignore longstanding principles of international law that such transactions in Nazi Germany were by definition coercive, voidable and should not be considered valid. 

"Germany advances the pretense that it has enacted procedures to address Nazi-looted art, but the reality is quite different," said Nicholas M. O'Donnell of Sullivan & Worcester LLP, an attorney for the descendants of the art owners, who filed the Complaint.  "The German government's refusal to recognize the losses incurred by these victims, who survived with their lives but lost their livelihoods and property, does not square with Germany's historical approach and responsibility."

The U.S. law that the descendants are turning to is the Foreign Sovereign Immunities Act (FSIA), which confers jurisdiction because the claims concern rights in property taken in violation of international law, and Germany and the SPK do business within the United States through exhibitions and other activities. The case also points to the 1998 Washington Conference Principles, which established standards of restitution for Nazi-confiscated art, and to which Germany previously agreed in a 1999 German resolution.

Today's filing is filled with accounts of how the owners escaped from Germany in the 1930's, what was happening around them to other Jews in Germany, and how their art collection landed in the possession of top figures in the Nazi government. The collection, housed in the Kunstgewerbemuseum in Berlin, is widely regarded to be worth more than $250,000,000, according to expert testimony in court documents.

BACKGROUND:

The Guelph Treasure, also known in Germany as the Welfenschatz, includes dozens of gilded and jeweled reliquary art from the 11th to 15th centuries that long belonged to Prussian aristocrats from the House of Brunswick-Luneberg. In 1929, the Duke of Brunswick sold off the collection, with part of it going to a consortium of art dealers owned by the plaintiffs' ancestors and predecessors: J.&S. Goldschmidt, I. Rosenbaum, and Z.M. Hackenbroch.

In the 1930's the Jewish ethnicity of those dealers brought them to the attention of Hermann Goering, whose titles as one of Adolf Hitler's top Nazi deputies included not only Commander of the Luftwaffe and President of the Reichstag, but also Prime Minister of Prussia.

The works were obtained by Goering's emissaries through a pressured transaction at a fraction of their worth, paid into blocked accounts to the members of the art owners' consortium.  Some of the owners had already begun preparations to flee Germany, others followed soon after. Fees demanded by Nazi authorities as the escapees fled were then stripped from the accounts through harsh "flight taxes," as described in a Gestapo document included in today's filing.

Coerced selling of property was a common tactic of the Third Reich during the period historians are now calling Early Nazi Terror. Germany's SPK has claimed that the transaction was done at the owners "free disposal." But so pleased with the Guelph acquisition was Goering that, according to a 1935 report in the Baltimore Sun, he personally presented the collection as a "Surprise Gift" to Hitler.

Other documents show the then-Mayor of Frankfurt, shortly after the Nazi takeover, boasting in a letter to his "most revered" leader, "Reichskanzler (Chancellor Hitler)," about the potential to take advantage of the Welfenschatz's owners and seeking Hitler's personal assistance in setting the stage for the forced transaction.  Another letter, concerning how to obtain the Welfenschatz from the Jews, is addressed to Paul Koerner, a Nazi leader who later participated in the infamous Wannsee Conference in which Hitler's "Final Solution" was formalized to oversee the extermination of all remaining Jews in Europe.

"The Jewish people who owned this art had their property squeezed out of them while their lives and the lives of their families were at risk," O'Donnell said. "The value of that collection was four to six times as much as these victims were paid. But no matter what the price was, it's an absolute outrage for the Prussian Cultural Heritage Foundation to state, as it did in reply to the finding of the advisory commission, that any sale under these circumstances in 1935 was done at 'free disposal' by Jews being persecuted." 

The plaintiffs' longtime German attorney, Markus Stoetzel, added, "The historical record is clear. After being publicly denounced as 'traitors' and targeted for their Jewish heritage, the members of the consortium had no real choice when they came up against Goering's henchmen."

In an apparent attempt to further its position, the Prussian Cultural Heritage Foundation is in the process of having the Welfenschatz collection designated as German national cultural heritage, which would restrict its physical movement. The plaintiffs dismissed the designation as a semantic ploy that has no effect on their ownership rights. "The unilateral nationalization of the collection by Germany doesn't change the facts we have provided that show it was obtained, like so many other confiscations of Jewish property, through forced manipulation by the Third Reich," said Mel Urbach, another attorney representing the descendants of the owners. "It is a shameful move that in actuality advances the illicit work of the Nazis. This is a clear violation of international accords on looted property that call for a fair and just resolution," added Urbach.

The descendants of the art owners include Gerald Stiebel of Santa Fe, New Mexico, whose ancestor was Isaak Rosenbaum, mentioned in today's filing. "My great-uncle Isaak was fortunate to make it to Amsterdam, but my father always talked about how the family had to leave so much behind." said Stiebel. "We've been looking for justice for years from today's German government. They claim the Nazis bought it in a fair marketplace. How is that possible? We hope we can find justice now in the United States Court system."

The U.S. District Court filing against the Federal Republic of Germany and the Prussian Cultural Heritage Foundation can be found here: (http://www.sandw.com/assets/htmldocuments/show_temp_pl.pdf)

The "Washington Conference Principles" on Nazi-Confiscated Art can be found here: http://m.state.gov/md122038.htm

About Sullivan & Worcester LLP

Sullivan & Worcester is a leading corporate law firm advising clients ranging from Fortune 500 companies to emerging businesses. With more than 185 lawyers in Boston, London, New York and Washington, D.C., the firm offers services in a wide range of areas, including corporate finance, banking, trade finance, securities and mutual funds, litigation, mergers and acquisitions, tax, real estate and REITs, private equity and venture capital, bankruptcy, environment and natural resources, climate change, renewable energy and water resources, regulatory law, and employment and benefits. For more information please visit www.sandw.com.

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