July 1, 2025 • 35 mins
Katie and Steve discuss the recent decision by the New York Supreme Court granting the Manhattan District Attorney request for a turnover order directing the Art Institute of Chicago to return a drawing by Egon Schiele, "Russan War Prisoner," that the museum acquired in 1966. Katie and Steve review the history of the ownership of the drawing by Fritz Grünbaum, a cabaret singer who was killed by the Nazis in 1941, and the legal proceedings involving his art collection leading up to this controversial decision.
Notes for this episode: https://artlawpodcast.com/2025/07/01/an-update-on-the-manhattan-das-turnover-proceeding-against-the-art-institute-of-chicago/
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Katie and Steve discuss topics based on news and magazine articles and court filings and not based on original research unless specifically noted.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Steve Schindler (00:01):
Hi, I'm Steve Schindler.
Katie Wilson-Milne (00:03):
I'm Katie Wilson-Milne.
Steve Schindler (00:04):
Welcome to the Art Law Podcast, a monthly podcast exploring the places where art intersects with and interferes with the law.
Katie Wilson-Milne (00:12):
The Art Law Podcast is sponsored by the law firm of Schindler Cohen & Hochman LLP, a premier litigation and art law boutique in New York City.
Okay, Steve, we're here for a maybe brief but complicated update in the criminal case between the Manhattan District Attorney's Office and the Art Institute of Chicago over a small Schiele drawing called "Russian War Prisoner" that has been the subject of both civil now and criminal proceedings that has been seized in place at the Art Institute for some time.
Steve Schindler (00:52):
The Art Institute of Chicago.
Katie Wilson-Milne (00:53):
Of Chicago, yep, and is from a collection, the collection of Fritz Grünbaum, which has been litigated numerous times, including a number of Schiele drawings from the exact same collection that presumably moved in the exact same circumstances through World War II.
So we've talked about a couple of those cases on the podcast before, Bakalar v. Vavra, which was a case over a decade ago, maybe even two decades ago? And a more recent case, Rief v. Nagy, again, both about Schiele works from Fritz Grünbaum's collection that came out somewhat differently, in different postures, but one in federal court, one in state court, and here we are again.
(01:34):
So this is an absolutely incredibly important controversial series of circumstances from the exact same collection, and we have an update.
Steve Schindler (01:44):
Right, and the last time we spoke about it was about last year, and that was when the Art Institute of Chicago filed their very lengthy opposition to the claim that was brought by the Manhattan District Attorney for a turnover in relation to the Schiele that was seized in place in Chicago.
Katie Wilson-Milne (02:05):
Right, and what was the basis of the DA doing that?
Steve Schindler (02:09):
Well, that's a loaded question, because there's a lot of...
One of the issues that has been litigated is what allows the Manhattan District Attorney to go to Chicago, Illinois, and try to seize a work of art that has been in the collection and openly on display in the Chicago Institute of Art for over 60 years?
(02:37):
And so that is one of the questions.
And why did that happen?
Very difficult to understand.
But the answer to that is- but one of the things that's interesting, at least to me, is that there was a civil case brought in New York by the heirs of Fritz Grünbaum to obtain the work from the Art Institute of Chicago.
(03:01):
And that case was brought in the Southern...
Katie Wilson-Milne (03:03):
For the typical claims, replevin, conversion...
Steve Schindler (03:05):
Replevin, conversion, the typical claims that are brought by heirs of Nazi victims and have been litigated here numerous times.
And that complaint in that was filed in, I believe, early 2023.
And then within six months of that civil claim being filed in the Southern District of New York, the Manhattan District Attorney commenced his application for a turnover order based on a penal statute in New York and brought that claim in state court in New York in a criminal part.
(03:44):
And so those two cases, basically over the same Schiele work of art, are proceeding through different courts in New York.
Katie Wilson-Milne (03:56):
At vastly different speeds.
Steve Schindler (03:57):
At different speeds, but, you know, they both kind of came to, in some ways, a culmination, because on April 23rd of this year, Judge Drysdale in the state Supreme Court issued her rather lengthy decision granting the district attorney's application for a turnover.
Katie Wilson-Milne (04:23):
Which had been opposed at length by the Art Institute of Chicago in extremely detailed, lengthy briefing.
Steve Schindler (04:30):
Right, and we had touched on that, because when we did our last update on this case, the law firm for the Art Institute had just filed their lengthy submission, which, as we outlined, both opposed the application of the district attorney, both on procedural grounds.
Katie Wilson-Milne (04:49):
Like jurisdiction.
Steve Schindler (04:50):
On jurisdiction, like why is it that the Manhattan District Attorney gets to go to Chicago and seize a work there?
Also, on the fact that they were using a criminal statute. There was nobody indicted or charged for a crime.
Katie Wilson-Milne (05:06):
Right.
Steve Schindler (05:06):
They were using a criminal statute for the theft statute in New York in order really to establish ownership of this object.
Katie Wilson-Milne (05:16):
Without charging anyone.
Steve Schindler (05:17):
Without charging anyone.
And then in addition to that, the Art Institute of Chicago, also in its voluminous papers, attacked the allegation that this work was in fact stolen or looted by the Nazis.
Katie Wilson-Milne (05:30):
By looking at detail provenance history.
Steve Schindler (05:33):
Looking at detail provenance.
And that was, I thought at the time, very impressive, because again, it was not just going after this on procedural grounds, but also trying to attack it on the merits.
And so, since that time, there was a series of hearings in New York before Judge Drysdale.
(05:54):
No evidentiary hearings, which is something that the Art Institute had pressed for.
Katie Wilson-Milne (05:59):
So no witnesses, no factual analysis. Right.
Steve Schindler (06:02):
No factual analysis.
But what you had was the lawyers on both sides spending hours arguing before the judge with documents that were being submitted, experts, et cetera.
But no actual live testimony, which the court ultimately found was not necessary in granting the district attorney's application.
(06:25):
As I said, that application was granted on April 23rd, and the judge's order basically said that the Art Institute now had to surrender the work and it was to be returned to the heirs of Fritz Grünbaum in the interim.
The Art Institute filed an appeal with the First Department, which is the appeals court that would hear an appeal of this case.
(06:49):
And as part of the application for an appeal, asked the appellate court to issue an emergency order, basically staying the lower court's decision, which the First Department did in fact grant on May 1st.
And so for the moment now, the criminal case is on appeal.
(07:11):
And ultimately, the First Department, after getting briefing, will make that decision.
One of the interesting things, I think, too, is that the Art Institute argued in the criminal case, one of the grounds to oppose the turnover was they said, look, there's a civil case for this exact same work.
Katie Wilson-Milne (07:31):
To determine ownership.
Steve Schindler (07:32):
To determine ownership in New York before a federal judge.
And at the time that they filed their brief, Judge Koeltl, who was a very, very accomplished trial judge in the Southern District, had found in favor of the Art Institute's motion to dismiss the heirs' complaint.
(07:53):
And so, really, in terms of determining who is entitled to possession of this work, you really should look to the civil courts, because that's...
Since that time, unfortunately, for the Art Institute and before the final decision was issued in the criminal case, the Second Circuit Court of Appeals reversed Judge Koeltl's decision and basically said that you could not decide this case on a motion to dismiss the complaint, that there needed to be a fuller factual development of everything, and therefore the case is now back before Judge Koeltl with instructions to allow it to go forward with a full development of the record.
(08:36):
So that argument that the Art Institute made kind of goes away for the moment.
Katie Wilson-Milne (08:41):
Yeah, and it's an unusual posture that I don't recall seeing in the, at least this context before where we have a civil case that's presumably going to take a lot longer and a criminal order that the Art Institute turn over the artwork- which let's say they do that, and then the civil case in a few years says, no, no, the Art Institute owns it.
Steve Schindler (09:06):
Right.
Right.
Although it seems in this case that while the- I'm sure the Art Institute of Chicago would prefer to allow the civil case to proceed, in many ways, if you're the heirs, you probably prefer to have the criminal case go forward.
Katie Wilson-Milne (09:40):
Of course, and it's free.
Steve Schindler (09:41):
And it's free.
Well, that's the other thing.
I mean, this is a situation where the district attorney is doing the work for the heirs in one proceeding, and the heirs have to pay for council in the other proceeding.
In one way or another, right.
Katie Wilson-Milne (10:03):
So, the Manhattan District Attorney's Office has a unit called the Antiquities Trafficking Unit, which is quite well known.
It has seized numerous artworks from major museums all over New York.
It has been involved in pressuring those institutions and private collectors to return works voluntarily, and has been quite influential in taking the burden off heirs, or in most cases, nation states, to go to civil court, make civil claims and spend years and millions of dollars asking for works back.
(10:35):
So that's been quite revolutionary. What's...
Steve Schindler (10:38):
And just to add one thing- I think until the Manhattan District Attorney seized upon the Grünbaum collection of Schiele works, his area had really been in trying to recover looted antiquities.
And now he's moved into a whole new area with this...
Where he hadn't before.
Katie Wilson-Milne (11:01):
We should say with the exception of the Cleveland Museum, which did push back against an out of state seizure in place that was similar, the Art Institute is really the first major institution to push back with this level of litigation against what the Manhattan DA is trying to do.
So it's interesting for a number of reasons.
(11:23):
I think we should remind our listeners also about the context of these artworks, which is particular and as we said, been litigated in numerous cases.
The reason obviously that the Manhattan DA is asking for a turnover order and got one is on the premise that these works were stolen by the Nazis.
(11:44):
And that no matter what happens afterwards, once something, an artwork is stolen- or any asset is stolen- it remains stolen.
It doesn't matter how many good faith purchasers buy it.
In this case, we know there were a number of buyers after the war.
It doesn't matter.
It never cleans that theft off the title.
And so the Art Institute, innocent or not as they may be, holds a stolen work of property, and so it should go back to the heirs.
(12:12):
That's the premise.
Steve Schindler (12:13):
Right. That's true, civil or criminal.
Katie Wilson-Milne (12:14):
Right.
There's criminal law that says it is a crime to be in possession of stolen property knowingly.
Steve Schindler (12:21):
Right.
Katie Wilson-Milne (12:21):
And there's a lot of controversy about that here, too, but that's the basis for the turnover order and the seizure in place.
Steve Schindler (12:28):
It's also apparently, and we're not criminal lawyers, but in reading the decision of the Supreme Court, they addressed the sort of statute of limitations issue, because that's clearly always an issue in a civil case.
And the way they address that is that basically it's a continuing crime.
The statute of limitations really never begins to run as long as someone is continuously in possession of stolen property, which is very different than the way the civil system works.
Katie Wilson-Milne (12:57):
Yeah, and I think that could itself be subject to some kind of broader constitutional challenge, maybe not in this case, but you can imagine a criminal defendant, right?
I mean, we have statute of limitations and repose for a reason, and they are the most important in the criminal context, right?
Because we cannot have a criminal system where someone is on the hook for their behavior and the state chooses not to prosecute them forever and ever and ever.
(13:22):
We don't have that.
So this kind of loophole in the court's acquiescence to the argument that the crime begins again every day...
Steve Schindler (13:35):
Yes.
Katie Wilson-Milne (13:36):
So, what do we know?
We know that this work, "Russian Prisoner of War," was at one point owned by Fritz Grünbaum.
We know Fritz Grünbaum was a very well-known, multifaceted resident of Austria and Germany.
I believe he was actually born in the Czech Republic, but he became a musician, an artist, and a cabaret performer, and actually is the inspiration for the main character in "Cabaret..."
(14:06):
So, he's a very important figure in Austrian society pre-war.
Steve Schindler (14:11):
And an opponent of the Nazis.
Katie Wilson-Milne (14:13):
And an outspoken opponent of the Nazis when they came to power, but was well-known before that, was a famous performer, and was actually born into an art-dealing family and was an art collector himself.
So he had amassed a very significant collection of what the Nazis considered degenerate art, sort of abstraction, 20th century works, impressionism, those types of works that the Nazis were not in favor of.
(14:39):
He lives in Vienna with his third wife, Lilly, and becomes the subject immediately of Nazi persecution as soon as the Nazis take over Austria because of his politics.
He ends up in Dachau, where despite unfortunate optimism from his family, he never returns from. He's moved around and he eventually dies, I think three years later...
(15:03):
Lilly herself and the rest of her family had an opportunity to leave Austria, and the rest of her family does.
Her sister, Matilda Lucas, who becomes important in this story, I believe she already had a brother out of the country and another sister, they leave, they're actually able to take their assets with them, because of their wealth, influence, and leaving early enough in the war.
(15:25):
Lilly, however, stays in Austria with the hope that she's going to get Fritz out of Dachau, and she misses her chance to leave.
And a long, painful story short, she ends up dying in a different concentration camp.
But before that happens, she goes through the manipulative and deliberate process the Nazis had for taking control over Jewish property.
(15:49):
First, they require families to create an inventory, which she does, of her own assets.
And then under some disputed circumstances of Fritz's assets, too. She provides those inventories.
Those artworks and the rest of the possessions presumably get placed in a storage unit that was used by the Nazis, and also used by regular people, to add complication to the story.
(16:14):
You know, maybe in the hopes that they were being prepared for export and her leaving the country, maybe because the Nazis put them there.
We don't know.
But they end up in this storage warehouse.
This work specifically, "Russian Prisoner of War," is not tracked in that process.
So we know that he owned- Fritz had owned the work, because it was part of a loan he made to an exhibition in 1928.
(16:40):
But we don't know anything about what happens to that artwork until the mid-50s...
But in between 1928 and 1956, we don't know what happens to this specific work.
(17:00):
And so the focus of this case is a lot of speculation and guessing about what is the most probable story for this particular artwork, given the facts that we know about Fritz's and Lillie's other assets, what happened to their family, and where it ends up after the war.
Steve Schindler (17:18):
Right. We know that it ends up with Mr. Kornfeld's gallery in Switzerland and eventually was sold to Otto Kallir who had moved to New York.
Katie Wilson-Milne (17:30):
He was a Jewish dealer.
Steve Schindler (17:31):
He was a Jewish dealer.
He fled Europe, and he established a gallery in New York.
And he purchased it from the Kornfeld Gallery in 1956.
And then, there are a couple of other transactions after that, and then eventually was purchased by the Art Institute of Chicago.
The question, I suppose, then, is how did Mr. Kornfeld get it, under what circumstances?
(17:57):
And the position of the Art Institute of Chicago is that the work was properly in the possession of Lilly Grünbaum's sister, who had fled the country, and that she sold it to Mr. Kornfeld, and there are allegations of, you know, there are either invoices that are contrived or not.
(18:21):
The district attorney says that they're contrived.
Katie Wilson-Milne (18:24):
They're two competing stories.
This story that the Art Institute and other litigants, including litigants who had the benefit of Kornfeld's deposition while he was still alive in 2017, and access to all of his files, and lots of evidence- which is cited, again, in this case- the argument is that this is the most probable story
(19:34):
And they lived after the war.
They were in Belgium.
So the story is, wouldn't it be most likely that she left some of her precious possessions with her family so that they could take it out of the country?
I don't know.
But what we do know is that Matilda Lucas, after the war, comes back to Europe and she develops a relationship with Kornfeld where she's selling artwork from her own collection.
(20:01):
And so it's not like there's this one-off sale that Kornfeld says, oh, her sister sold it to me.
There's a series of letters and years of communication by which she is having a relationship with this art dealer.
And the Art Institute says, like, if she thought that Kornfeld was dealing in her dead sister's property illegally, why would she have this multi-year-long relationship with her?
(20:23):
And wouldn't it make sense since we know she was selling other Schiele works to him that one of these was Lilly's?
And isn't it most likely in that case that Lilly gave it to her after the war?
Now, we don't know for sure, because there's no document from her that, you know, that's completely legitimate with no questions that says, I am the rightful heir of Lilly and here is the work and I own it and this is why and now I'm selling it to you, right?
(20:53):
Like that paper trail isn't that precise.
Steve Schindler (20:55):
Right.
And there are some question marks that have been put around whether or not she is or was the rightful heir to Lilly.
Because she had made some claims to that effect and then she withdrew them, and so at least from the district attorneys and the heirs point of view, one of their arguments is that she wasn't Lilly's rightful heir.
Katie Wilson-Milne (21:16):
So let me say what the other story is.
Steve Schindler (21:18):
Okay.
Katie Wilson-Milne (21:18):
Yeah.
So since there are so many facts, it could get overwhelming.
So the district attorney's office says, you know, look, basically a lot of this doesn't really matter.
What we know is he owned this artwork.
He was victimized by the Nazis.
He had this incredible collection.
We know the collection, you know, not inventoried by item, but in general, the collection, we know, goes into the storage facility that the Nazis have access to, and we don't know what happens to it until 1956.
(21:48):
We know what the Nazis were doing in other cases.
They were looting artwork, they were selling it in Switzerland, they were taking it into their own private collections.
We know they did these kind of things.
Isn't it reasonable to think that's exactly what happened in this case?
And then it gets to a dealer in Switzerland that many believe or know dealt with the Nazis and sold works for them as well.
(22:11):
So, shouldn't we take all that circumstantial evidence and assume that this work was looted?
And they do brush aside the Matilda Lucas point on a number of grounds, one being that there's absolutely no evidence that she was the legal heir.
Now, that might not matter if Lilly gave it to her as a gift and had a right to do so, but they say, you know, Fritz's property was distinct.
(22:39):
There's no evidence even that Lilly had a right to alienate it.
And then after the war, Matilda Lucas made two attempts, different attempts, to establish herself as a rightful heir inheritor of Lilly's assets and withdrew both of them, you know, sort of indicating there was some problem in proving that she was an heir.
(22:59):
Now, that could have happened for a number of reasons that have nothing to do with her sister, giving her or not giving her works to take out of the country.
But, you know, those are the different stories and they really are, you know, they're pulling on different strings.
One is, let's look at all the actual evidence we have and piece it together as carefully as possible.
(23:19):
And the district attorney's argument, which is like, we are going to apply some presumption of wrongdoing when we don't know about what happened in this particular period of time to works that we know the Nazis were interested in getting out of Europe.
Steve Schindler (23:33):
Right.
So where does that leave us?
Katie Wilson-Milne (23:36):
So one of the interesting things about Judge Drysdale's opinion is that it's, one, incredibly long, and it doesn't actually address any of the arguments in the Art Institute of Chicago's brief.
Steve Schindler (23:49):
And a lot of the length is also, there's probably 20 pages or so of a sort of recitation of sort of post-war principles relating to the return of Nazi-looted art, the Washington Principles and things like that.
And so it didn't really have anything to do exactly with what...
Katie Wilson-Milne (24:07):
With this case, yeah...
Steve Schindler (24:08):
...with the case.
Except to say that I think one of the things that she...
Just to get back to your point, I'm sorry, which is that she doesn't really address the Art Institute's arguments per se.
What she really seems to do is take the arguments of the Manhattan District Attorney and kind of, you know...
Katie Wilson-Milne (24:25):
Write them down again.
Steve Schindler (24:26):
Write them down again.
Katie Wilson-Milne (24:27):
But it's interesting.
You know, you have to go back to the brief before this, not the appellate stuff, which we don't have access to yet.
We go back to the Art Institute's brief before this decision, and it responds to each of the points in the decision that she doesn't deal with.
And it's not that this is incorrect, right?
This is a highly suspect set of circumstances, and this is a moral issue as well as a purely legal one.
(24:55):
So- but it's just interesting that Judge Drysdale, you know, really, she clearly buys the Manhattan DA's arguments, uses- summarizes all their evidence, then spends pages talking about a bunch of non-legal, non-binding sort of ethical commitments and developments, and also pages talking about what the Nazis did during the war that are not linked to this painting at all, and sort of ends with, it should go back, I don't need to have a further hearing, I know everything I need to know.
(25:26):
And that- it reads more as a sort of policy moral statement than it does...
Steve Schindler (25:34):
It starts with a quote from Elie Wiesel.
I mean, she says, "the opposite of art is not ugliness, it's indifference."
And that's where it starts.
Now, what that has to do with the legal issues before her is not entirely...
Katie Wilson-Milne (25:47):
Or the true factual disputes.
Steve Schindler (25:50):
...clear. So, one of the things that I find interesting to think about a little bit is
In the civil case, the Art Institute really moved to dismiss the complaint at a preliminary stage really based on sort of technical arguments, including statute of limitations.
(26:14):
And, you know, if you think about, again, the Washington Principles and the sort of ethical overlay to this, you know, you would sort of want the Art Institute to sort of look at this on the merits as opposed to making technical arguments.
In the criminal case, on the other hand, they put forth, you know, a huge amount.
Katie Wilson-Milne (26:35):
They go all in on it.
Steve Schindler (26:37):
And so, it's just interesting to me that that's the forum that they have decided to use to make these big arguments, although unsuccessfully.
And they'll have an opportunity now in the civil case, because, I mean, depending on how the penal case comes out, the civil case may ultimately be irrelevant.
But they'll have an opportunity to develop and make those same arguments before Judge Koeltl.
Katie Wilson-Milne (27:01):
Right.
Well, they couldn't do that in the civil case, because of its posture, on a motion to dismiss, right?
These facts weren't in evidence.
They wouldn't have been able to.
Steve Schindler (27:10):
But they chose to make that motion.
Katie Wilson-Milne (27:12):
They could have not made the motion.
Steve Schindler (27:13):
They could have answered the complaint and they could have proceeded with discovery and on the merits, but they chose to make...
Katie Wilson-Milne (27:19):
What they did try to do was refer the court to the prior decision in Bakalar v. Vavra, which had looked at a lot of these factual issues and is on the record, and so the court could take notice of, hoping that the court would find that these issues had already been decided.
Ultimately, the Second Circuit didn't allow for, you know, at least the analysis of laches to carry over, which is a very fact-based argument, based on the kinds of disputed facts we're talking about.
(27:48):
So I mean, that might still happen, but it couldn't happen at that stage.
Steve Schindler (27:53):
Right.
And what do you make of the fact that this was clearly- the district attorney went after, in addition to this, 11 other Schiele works...
Katie Wilson-Milne (28:06):
Yeah, 10 out of 11 other parties just gave the works back.
Steve Schindler (28:10):
That's right.
Katie Wilson-Milne (28:16):
So only the Art Institute.
Steve Schindler (28:17):
And why do we think that is?
Katie Wilson-Milne (28:20):
You know, we can't know.
We haven't talked to the lawyers for the Art Institute, and I don't know that they would tell us the truth about why.
But I think in general, we've seen with these turnover orders that there's a lot of political, cultural, and social pressure to just turn stuff over.
It's not a good look to say, no, I'm holding on to stolen- what you call stolen property.
(28:42):
It's not a moment for that.
Steve Schindler (28:44):
Yeah.
Katie Wilson-Milne (28:44):
And I think there's some pressure.
Steve Schindler (28:47):
And also economic too.
I mean, if you think about museums and their being strapped for cash and funds.
Katie Wilson-Milne (28:52):
Yeah, this is an expensive fight.
Steve Schindler (28:54):
This is a very expensive fight, assuming that they're paying the market rates for these law firms, maybe getting a little bit of a discount.
But the work that's being done both on the civil side by the Wilson Sonsini firm and on the criminal side with the McDermott firm, these are big firms doing a lot of work.
Katie Wilson-Milne (29:13):
I think the other thing to keep in mind is that museums' commitments- both in their own collection policies, in the membership organizations they're part of, and their just general commitments- they have committed to taking restitution claims seriously.
So, unless an institution has a really good reason to believe that on the merits, something was not stolen or taken or transacted under compromised circumstances during World War II, you know, they're not going to fight that, right?
(29:44):
Because there's a whole set of commitments that are much more seriously taken now.
So I do think the Art Institute must have a true belief in the merits of these arguments that this work was not stolen, that it stayed in the family, that it was sold by the family after the war, and that the Manhattan DA is overreaching and, you know, not looking at the evidence correctly or carefully, you know, and that there's a real threat to letting these kind of cases go through without forcing that kind of detailed historical analysis.
Steve Schindler (30:17):
Yeah, I think that's right.
And I think, you know, on the criminal case, I think there's the added argument, perhaps, that the Art Institute is, you know, aggrieved by the fact that this law enforcement...
(30:52):
And I think there are legitimate reasons to push back on that.
Obviously, in the civil case, they don't really have that same argument.
Katie Wilson-Milne (31:03):
You know, I think one of the questions we all have about this is, so maybe the Art Institute has a good legal argument.
I don't know, but, you know, they do put forth a very detailed account of all the evidence in a way that the DA's office doesn't, and that Judge Drysdale does not address.
(31:23):
I mean, they really do respond to every single point in the decision.
They already had done that in the briefing, and it's not addressed by her.
But no matter what the facts are, this work, you know, unless Grünbaum sold it before the war, which is possible, but no one's asserting that.
The Art Institute is saying, the most likely scenario is, it survives the war through Lilly's family, right?
(31:49):
So no matter what, in either scenario, this work leaves Fritz and Lilly's possession because of Nazi persecution in Europe, right?
Like, there's no question about that.
So then I think there really is this sort of, it's not technical in the sense that it's a technical legal argument or- but something not right happened here that led to this artwork getting to Switzerland, being sold.
(32:14):
And it's not that the Art Institute did anything wrong, or that anyone after Kornfeld did anything wrong, but it's just this wouldn't have left their family unless they were being persecuted by the Nazis.
And then they died.
They were killed by the Nazis.
And they were left with nothing.
So...
Steve Schindler (32:31):
Right, and if you accept the Washington Principles in their broadest sense, this is a work that is- clearly comes within that, those principles.
Katie Wilson-Milne (32:39):
Yeah.
I mean, I don't know that it would come...
Those principles are obviously rebuttable.
There's a presumption, and what the Art Institute is trying to do is rebut the presumption that any transaction was illicit or unlawful.
And they say it wasn't.
I mean, Lilly voluntarily gave it to her sister.
Her sister had a right to take it.
She left the country with it.
(32:59):
And she sold it.
Steve Schindler (33:00):
Right.
Yes, I suppose they can rebut that.
But any voluntary relinquishment of possession at that point in time, I think is subject to a lot of questions.
Katie Wilson-Milne (33:11):
It's subject to questions, but they're rebuttable, yeah.
Steve Schindler (33:13):
So what happens next?
First of all, we should take this opportunity, because we're going to have to wait now to see what happens in the First Department on the appeal from the criminal case.
And then also, there'll be some further developments in the civil case as well.
It would be great if any of the lawyers who are involved in the case, whether it be from the Manhattan District Attorney's Office or the lawyers in the penal case or the lawyers in the civil case- both from the plaintiff's side on the civil case or the defendant's side- want to come on the podcast, they're hereby invited.
Katie Wilson-Milne (33:47):
Yeah, that would be great.
Steve Schindler (33:47):
And we would love to hear from them.
Katie Wilson-Milne (33:50):
And we can do a fuller episode where we dive in in a lot more detail, both to the story of the Grünbaums and their collection and to the legal elements animating these numerous cases.
Steve Schindler (34:01):
Yeah, but it's here for a while.
Katie Wilson-Milne (34:03):
Yeah.
Steve Schindler (34:04):
All right.
And that's it for today's podcast. Please subscribe to us wherever you get your podcasts, and send us feedback at podcast@schlaw.com. And if you like what you hear, give us a five-star rating. We are also featuring the original music of Chris Thompson.
(34:26):
And finally, we want to thank our fabulous producer, Jackie Santos, for making us sound so good.
Katie Wilson-Milne (34:31):
Until next time, I'm Katie Wilson-Milne.
Steve Schindler (34:33):
And I'm Steve Schindler, bringing you the Art Law Podcast, a podcast exploring the places where art intersects with and interferes with the law.
Katie Wilson-Milne (34:43):
The information provided in this podcast is not intended to be a source of legal advice.
You should not consider the information provided to be an invitation for an attorney-client relationship, should not rely on the information as legal advice for any purpose, and should always seek the legal advice of competent counsel in the relevant jurisdiction.
Hi, I'm Steve Schindler.
Katie Wilson-Milne (00:03):
I'm Katie Wilson-Milne.
Steve Schindler (00:04):
Welcome to the Art Law Podcast, a monthly podcast exploring the places where art intersects with and interferes with the law.
Katie Wilson-Milne (00:12):
The Art Law Podcast is sponsored by the law firm of Schindler Cohen & Hochman LLP, a premier litigation and art law boutique in New York City.
Okay, Steve, we're here for a maybe brief but complicated update in the criminal case between the Manhattan District Attorney's Office and the Art Institute of Chicago over a small Schiele drawing called "Russian War Prisoner" that has been the subject of both civil now and criminal proceedings that has been seized in place at the Art Institute for some time.
Steve Schindler (00:52):
The Art Institute of Chicago.
Katie Wilson-Milne (00:53):
Of Chicago, yep, and is from a collection, the collection of Fritz Grünbaum, which has been litigated numerous times, including a number of Schiele drawings from the exact same collection that presumably moved in the exact same circumstances through World War II.
So we've talked about a couple of those cases on the podcast before, Bakalar v. Vavra, which was a case over a decade ago, maybe even two decades ago? And a more recent case, Rief v. Nagy, again, both about Schiele works from Fritz Grünbaum's collection that came out somewhat differently, in different postures, but one in federal court, one in state court, and here we are again.
(01:34):
So this is an absolutely incredibly important controversial series of circumstances from the exact same collection, and we have an update.
Steve Schindler (01:44):
Right, and the last time we spoke about it was about last year, and that was when the Art Institute of Chicago filed their very lengthy opposition to the claim that was brought by the Manhattan District Attorney for a turnover in relation to the Schiele that was seized in place in Chicago.
Katie Wilson-Milne (02:05):
Right, and what was the basis of the DA doing that?
Steve Schindler (02:09):
Well, that's a loaded question, because there's a lot of...
One of the issues that has been litigated is what allows the Manhattan District Attorney to go to Chicago, Illinois, and try to seize a work of art that has been in the collection and openly on display in the Chicago Institute of Art for over 60 years?
(02:37):
And so that is one of the questions.
And why did that happen?
Very difficult to understand.
But the answer to that is- but one of the things that's interesting, at least to me, is that there was a civil case brought in New York by the heirs of Fritz Grünbaum to obtain the work from the Art Institute of Chicago.
(03:01):
And that case was brought in the Southern...
Katie Wilson-Milne (03:03):
For the typical claims, replevin, conversion...
Steve Schindler (03:05):
Replevin, conversion, the typical claims that are brought by heirs of Nazi victims and have been litigated here numerous times.
And that complaint in that was filed in, I believe, early 2023.
And then within six months of that civil claim being filed in the Southern District of New York, the Manhattan District Attorney commenced his application for a turnover order based on a penal statute in New York and brought that claim in state court in New York in a criminal part.
(03:44):
And so those two cases, basically over the same Schiele work of art, are proceeding through different courts in New York.
Katie Wilson-Milne (03:56):
At vastly different speeds.
Steve Schindler (03:57):
At different speeds, but, you know, they both kind of came to, in some ways, a culmination, because on April 23rd of this year, Judge Drysdale in the state Supreme Court issued her rather lengthy decision granting the district attorney's application for a turnover.
Katie Wilson-Milne (04:23):
Which had been opposed at length by the Art Institute of Chicago in extremely detailed, lengthy briefing.
Steve Schindler (04:30):
Right, and we had touched on that, because when we did our last update on this case, the law firm for the Art Institute had just filed their lengthy submission, which, as we outlined, both opposed the application of the district attorney, both on procedural grounds.
Katie Wilson-Milne (04:49):
Like jurisdiction.
Steve Schindler (04:50):
On jurisdiction, like why is it that the Manhattan District Attorney gets to go to Chicago and seize a work there?
Also, on the fact that they were using a criminal statute. There was nobody indicted or charged for a crime.
Katie Wilson-Milne (05:06):
Right.
Steve Schindler (05:06):
They were using a criminal statute for the theft statute in New York in order really to establish ownership of this object.
Katie Wilson-Milne (05:16):
Without charging anyone.
Steve Schindler (05:17):
Without charging anyone.
And then in addition to that, the Art Institute of Chicago, also in its voluminous papers, attacked the allegation that this work was in fact stolen or looted by the Nazis.
Katie Wilson-Milne (05:30):
By looking at detail provenance history.
Steve Schindler (05:33):
Looking at detail provenance.
And that was, I thought at the time, very impressive, because again, it was not just going after this on procedural grounds, but also trying to attack it on the merits.
And so, since that time, there was a series of hearings in New York before Judge Drysdale.
(05:54):
No evidentiary hearings, which is something that the Art Institute had pressed for.
Katie Wilson-Milne (05:59):
So no witnesses, no factual analysis. Right.
Steve Schindler (06:02):
No factual analysis.
But what you had was the lawyers on both sides spending hours arguing before the judge with documents that were being submitted, experts, et cetera.
But no actual live testimony, which the court ultimately found was not necessary in granting the district attorney's application.
(06:25):
As I said, that application was granted on April 23rd, and the judge's order basically said that the Art Institute now had to surrender the work and it was to be returned to the heirs of Fritz Grünbaum in the interim.
The Art Institute filed an appeal with the First Department, which is the appeals court that would hear an appeal of this case.
(06:49):
And as part of the application for an appeal, asked the appellate court to issue an emergency order, basically staying the lower court's decision, which the First Department did in fact grant on May 1st.
And so for the moment now, the criminal case is on appeal.
(07:11):
And ultimately, the First Department, after getting briefing, will make that decision.
One of the interesting things, I think, too, is that the Art Institute argued in the criminal case, one of the grounds to oppose the turnover was they said, look, there's a civil case for this exact same work.
Katie Wilson-Milne (07:31):
To determine ownership.
Steve Schindler (07:32):
To determine ownership in New York before a federal judge.
And at the time that they filed their brief, Judge Koeltl, who was a very, very accomplished trial judge in the Southern District, had found in favor of the Art Institute's motion to dismiss the heirs' complaint.
(07:53):
And so, really, in terms of determining who is entitled to possession of this work, you really should look to the civil courts, because that's...
Since that time, unfortunately, for the Art Institute and before the final decision was issued in the criminal case, the Second Circuit Court of Appeals reversed Judge Koeltl's decision and basically said that you could not decide this case on a motion to dismiss the complaint, that there needed to be a fuller factual development of everything, and therefore the case is now back before Judge Koeltl with instructions to allow it to go forward with a full development of the record.
(08:36):
So that argument that the Art Institute made kind of goes away for the moment.
Katie Wilson-Milne (08:41):
Yeah, and it's an unusual posture that I don't recall seeing in the, at least this context before where we have a civil case that's presumably going to take a lot longer and a criminal order that the Art Institute turn over the artwork- which let's say they do that, and then the civil case in a few years says, no, no, the Art Institute owns it.
Steve Schindler (09:06):
Right.
Right.
Although it seems in this case that while the- I'm sure the Art Institute of Chicago would prefer to allow the civil case to proceed, in many ways, if you're the heirs, you probably prefer to have the criminal case go forward.
Katie Wilson-Milne (09:40):
Of course, and it's free.
Steve Schindler (09:41):
And it's free.
Well, that's the other thing.
I mean, this is a situation where the district attorney is doing the work for the heirs in one proceeding, and the heirs have to pay for council in the other proceeding.
In one way or another, right.
Katie Wilson-Milne (10:03):
So, the Manhattan District Attorney's Office has a unit called the Antiquities Trafficking Unit, which is quite well known.
It has seized numerous artworks from major museums all over New York.
It has been involved in pressuring those institutions and private collectors to return works voluntarily, and has been quite influential in taking the burden off heirs, or in most cases, nation states, to go to civil court, make civil claims and spend years and millions of dollars asking for works back.
(10:35):
So that's been quite revolutionary. What's...
Steve Schindler (10:38):
And just to add one thing- I think until the Manhattan District Attorney seized upon the Grünbaum collection of Schiele works, his area had really been in trying to recover looted antiquities.
And now he's moved into a whole new area with this...
Where he hadn't before.
Katie Wilson-Milne (11:01):
We should say with the exception of the Cleveland Museum, which did push back against an out of state seizure in place that was similar, the Art Institute is really the first major institution to push back with this level of litigation against what the Manhattan DA is trying to do.
So it's interesting for a number of reasons.
(11:23):
I think we should remind our listeners also about the context of these artworks, which is particular and as we said, been litigated in numerous cases.
The reason obviously that the Manhattan DA is asking for a turnover order and got one is on the premise that these works were stolen by the Nazis.
(11:44):
And that no matter what happens afterwards, once something, an artwork is stolen- or any asset is stolen- it remains stolen.
It doesn't matter how many good faith purchasers buy it.
In this case, we know there were a number of buyers after the war.
It doesn't matter.
It never cleans that theft off the title.
And so the Art Institute, innocent or not as they may be, holds a stolen work of property, and so it should go back to the heirs.
(12:12):
That's the premise.
Steve Schindler (12:13):
Right. That's true, civil or criminal.
Katie Wilson-Milne (12:14):
Right.
There's criminal law that says it is a crime to be in possession of stolen property knowingly.
Steve Schindler (12:21):
Right.
Katie Wilson-Milne (12:21):
And there's a lot of controversy about that here, too, but that's the basis for the turnover order and the seizure in place.
Steve Schindler (12:28):
It's also apparently, and we're not criminal lawyers, but in reading the decision of the Supreme Court, they addressed the sort of statute of limitations issue, because that's clearly always an issue in a civil case.
And the way they address that is that basically it's a continuing crime.
The statute of limitations really never begins to run as long as someone is continuously in possession of stolen property, which is very different than the way the civil system works.
Katie Wilson-Milne (12:57):
Yeah, and I think that could itself be subject to some kind of broader constitutional challenge, maybe not in this case, but you can imagine a criminal defendant, right?
I mean, we have statute of limitations and repose for a reason, and they are the most important in the criminal context, right?
Because we cannot have a criminal system where someone is on the hook for their behavior and the state chooses not to prosecute them forever and ever and ever.
(13:22):
We don't have that.
So this kind of loophole in the court's acquiescence to the argument that the crime begins again every day...
Steve Schindler (13:35):
Yes.
Katie Wilson-Milne (13:36):
So, what do we know?
We know that this work, "Russian Prisoner of War," was at one point owned by Fritz Grünbaum.
We know Fritz Grünbaum was a very well-known, multifaceted resident of Austria and Germany.
I believe he was actually born in the Czech Republic, but he became a musician, an artist, and a cabaret performer, and actually is the inspiration for the main character in "Cabaret..."
(14:06):
So, he's a very important figure in Austrian society pre-war.
Steve Schindler (14:11):
And an opponent of the Nazis.
Katie Wilson-Milne (14:13):
And an outspoken opponent of the Nazis when they came to power, but was well-known before that, was a famous performer, and was actually born into an art-dealing family and was an art collector himself.
So he had amassed a very significant collection of what the Nazis considered degenerate art, sort of abstraction, 20th century works, impressionism, those types of works that the Nazis were not in favor of.
(14:39):
He lives in Vienna with his third wife, Lilly, and becomes the subject immediately of Nazi persecution as soon as the Nazis take over Austria because of his politics.
He ends up in Dachau, where despite unfortunate optimism from his family, he never returns from. He's moved around and he eventually dies, I think three years later...
(15:03):
Lilly herself and the rest of her family had an opportunity to leave Austria, and the rest of her family does.
Her sister, Matilda Lucas, who becomes important in this story, I believe she already had a brother out of the country and another sister, they leave, they're actually able to take their assets with them, because of their wealth, influence, and leaving early enough in the war.
(15:25):
Lilly, however, stays in Austria with the hope that she's going to get Fritz out of Dachau, and she misses her chance to leave.
And a long, painful story short, she ends up dying in a different concentration camp.
But before that happens, she goes through the manipulative and deliberate process the Nazis had for taking control over Jewish property.
(15:49):
First, they require families to create an inventory, which she does, of her own assets.
And then under some disputed circumstances of Fritz's assets, too. She provides those inventories.
Those artworks and the rest of the possessions presumably get placed in a storage unit that was used by the Nazis, and also used by regular people, to add complication to the story.
(16:14):
You know, maybe in the hopes that they were being prepared for export and her leaving the country, maybe because the Nazis put them there.
We don't know.
But they end up in this storage warehouse.
This work specifically, "Russian Prisoner of War," is not tracked in that process.
So we know that he owned- Fritz had owned the work, because it was part of a loan he made to an exhibition in 1928.
(16:40):
But we don't know anything about what happens to that artwork until the mid-50s...
But in between 1928 and 1956, we don't know what happens to this specific work.
(17:00):
And so the focus of this case is a lot of speculation and guessing about what is the most probable story for this particular artwork, given the facts that we know about Fritz's and Lillie's other assets, what happened to their family, and where it ends up after the war.
Steve Schindler (17:18):
Right. We know that it ends up with Mr. Kornfeld's gallery in Switzerland and eventually was sold to Otto Kallir who had moved to New York.
Katie Wilson-Milne (17:30):
He was a Jewish dealer.
Steve Schindler (17:31):
He was a Jewish dealer.
He fled Europe, and he established a gallery in New York.
And he purchased it from the Kornfeld Gallery in 1956.
And then, there are a couple of other transactions after that, and then eventually was purchased by the Art Institute of Chicago.
The question, I suppose, then, is how did Mr. Kornfeld get it, under what circumstances?
(17:57):
And the position of the Art Institute of Chicago is that the work was properly in the possession of Lilly Grünbaum's sister, who had fled the country, and that she sold it to Mr. Kornfeld, and there are allegations of, you know, there are either invoices that are contrived or not.
(18:21):
The district attorney says that they're contrived.
Katie Wilson-Milne (18:24):
They're two competing stories.
This story that the Art Institute and other litigants, including litigants who had the benefit of Kornfeld's deposition while he was still alive in 2017, and access to all of his files, and lots of evidence- which is cited, again, in this case- the argument is that this is the most probable story
(19:34):
And they lived after the war.
They were in Belgium.
So the story is, wouldn't it be most likely that she left some of her precious possessions with her family so that they could take it out of the country?
I don't know.
But what we do know is that Matilda Lucas, after the war, comes back to Europe and she develops a relationship with Kornfeld where she's selling artwork from her own collection.
(20:01):
And so it's not like there's this one-off sale that Kornfeld says, oh, her sister sold it to me.
There's a series of letters and years of communication by which she is having a relationship with this art dealer.
And the Art Institute says, like, if she thought that Kornfeld was dealing in her dead sister's property illegally, why would she have this multi-year-long relationship with her?
(20:23):
And wouldn't it make sense since we know she was selling other Schiele works to him that one of these was Lilly's?
And isn't it most likely in that case that Lilly gave it to her after the war?
Now, we don't know for sure, because there's no document from her that, you know, that's completely legitimate with no questions that says, I am the rightful heir of Lilly and here is the work and I own it and this is why and now I'm selling it to you, right?
(20:53):
Like that paper trail isn't that precise.
Steve Schindler (20:55):
Right.
And there are some question marks that have been put around whether or not she is or was the rightful heir to Lilly.
Because she had made some claims to that effect and then she withdrew them, and so at least from the district attorneys and the heirs point of view, one of their arguments is that she wasn't Lilly's rightful heir.
Katie Wilson-Milne (21:16):
So let me say what the other story is.
Steve Schindler (21:18):
Okay.
Katie Wilson-Milne (21:18):
Yeah.
So since there are so many facts, it could get overwhelming.
So the district attorney's office says, you know, look, basically a lot of this doesn't really matter.
What we know is he owned this artwork.
He was victimized by the Nazis.
He had this incredible collection.
We know the collection, you know, not inventoried by item, but in general, the collection, we know, goes into the storage facility that the Nazis have access to, and we don't know what happens to it until 1956.
(21:48):
We know what the Nazis were doing in other cases.
They were looting artwork, they were selling it in Switzerland, they were taking it into their own private collections.
We know they did these kind of things.
Isn't it reasonable to think that's exactly what happened in this case?
And then it gets to a dealer in Switzerland that many believe or know dealt with the Nazis and sold works for them as well.
(22:11):
So, shouldn't we take all that circumstantial evidence and assume that this work was looted?
And they do brush aside the Matilda Lucas point on a number of grounds, one being that there's absolutely no evidence that she was the legal heir.
Now, that might not matter if Lilly gave it to her as a gift and had a right to do so, but they say, you know, Fritz's property was distinct.
(22:39):
There's no evidence even that Lilly had a right to alienate it.
And then after the war, Matilda Lucas made two attempts, different attempts, to establish herself as a rightful heir inheritor of Lilly's assets and withdrew both of them, you know, sort of indicating there was some problem in proving that she was an heir.
(22:59):
Now, that could have happened for a number of reasons that have nothing to do with her sister, giving her or not giving her works to take out of the country.
But, you know, those are the different stories and they really are, you know, they're pulling on different strings.
One is, let's look at all the actual evidence we have and piece it together as carefully as possible.
(23:19):
And the district attorney's argument, which is like, we are going to apply some presumption of wrongdoing when we don't know about what happened in this particular period of time to works that we know the Nazis were interested in getting out of Europe.
Steve Schindler (23:33):
Right.
So where does that leave us?
Katie Wilson-Milne (23:36):
So one of the interesting things about Judge Drysdale's opinion is that it's, one, incredibly long, and it doesn't actually address any of the arguments in the Art Institute of Chicago's brief.
Steve Schindler (23:49):
And a lot of the length is also, there's probably 20 pages or so of a sort of recitation of sort of post-war principles relating to the return of Nazi-looted art, the Washington Principles and things like that.
And so it didn't really have anything to do exactly with what...
Katie Wilson-Milne (24:07):
With this case, yeah...
Steve Schindler (24:08):
...with the case.
Except to say that I think one of the things that she...
Just to get back to your point, I'm sorry, which is that she doesn't really address the Art Institute's arguments per se.
What she really seems to do is take the arguments of the Manhattan District Attorney and kind of, you know...
Katie Wilson-Milne (24:25):
Write them down again.
Steve Schindler (24:26):
Write them down again.
Katie Wilson-Milne (24:27):
But it's interesting.
You know, you have to go back to the brief before this, not the appellate stuff, which we don't have access to yet.
We go back to the Art Institute's brief before this decision, and it responds to each of the points in the decision that she doesn't deal with.
And it's not that this is incorrect, right?
This is a highly suspect set of circumstances, and this is a moral issue as well as a purely legal one.
(24:55):
So- but it's just interesting that Judge Drysdale, you know, really, she clearly buys the Manhattan DA's arguments, uses- summarizes all their evidence, then spends pages talking about a bunch of non-legal, non-binding sort of ethical commitments and developments, and also pages talking about what the Nazis did during the war that are not linked to this painting at all, and sort of ends with, it should go back, I don't need to have a further hearing, I know everything I need to know.
(25:26):
And that- it reads more as a sort of policy moral statement than it does...
Steve Schindler (25:34):
It starts with a quote from Elie Wiesel.
I mean, she says, "the opposite of art is not ugliness, it's indifference."
And that's where it starts.
Now, what that has to do with the legal issues before her is not entirely...
Katie Wilson-Milne (25:47):
Or the true factual disputes.
Steve Schindler (25:50):
...clear. So, one of the things that I find interesting to think about a little bit is
In the civil case, the Art Institute really moved to dismiss the complaint at a preliminary stage really based on sort of technical arguments, including statute of limitations.
(26:14):
And, you know, if you think about, again, the Washington Principles and the sort of ethical overlay to this, you know, you would sort of want the Art Institute to sort of look at this on the merits as opposed to making technical arguments.
In the criminal case, on the other hand, they put forth, you know, a huge amount.
Katie Wilson-Milne (26:35):
They go all in on it.
Steve Schindler (26:37):
And so, it's just interesting to me that that's the forum that they have decided to use to make these big arguments, although unsuccessfully.
And they'll have an opportunity now in the civil case, because, I mean, depending on how the penal case comes out, the civil case may ultimately be irrelevant.
But they'll have an opportunity to develop and make those same arguments before Judge Koeltl.
Katie Wilson-Milne (27:01):
Right.
Well, they couldn't do that in the civil case, because of its posture, on a motion to dismiss, right?
These facts weren't in evidence.
They wouldn't have been able to.
Steve Schindler (27:10):
But they chose to make that motion.
Katie Wilson-Milne (27:12):
They could have not made the motion.
Steve Schindler (27:13):
They could have answered the complaint and they could have proceeded with discovery and on the merits, but they chose to make...
Katie Wilson-Milne (27:19):
What they did try to do was refer the court to the prior decision in Bakalar v. Vavra, which had looked at a lot of these factual issues and is on the record, and so the court could take notice of, hoping that the court would find that these issues had already been decided.
Ultimately, the Second Circuit didn't allow for, you know, at least the analysis of laches to carry over, which is a very fact-based argument, based on the kinds of disputed facts we're talking about.
(27:48):
So I mean, that might still happen, but it couldn't happen at that stage.
Steve Schindler (27:53):
Right.
And what do you make of the fact that this was clearly- the district attorney went after, in addition to this, 11 other Schiele works...
Katie Wilson-Milne (28:06):
Yeah, 10 out of 11 other parties just gave the works back.
Steve Schindler (28:10):
That's right.
Katie Wilson-Milne (28:16):
So only the Art Institute.
Steve Schindler (28:17):
And why do we think that is?
Katie Wilson-Milne (28:20):
You know, we can't know.
We haven't talked to the lawyers for the Art Institute, and I don't know that they would tell us the truth about why.
But I think in general, we've seen with these turnover orders that there's a lot of political, cultural, and social pressure to just turn stuff over.
It's not a good look to say, no, I'm holding on to stolen- what you call stolen property.
(28:42):
It's not a moment for that.
Steve Schindler (28:44):
Yeah.
Katie Wilson-Milne (28:44):
And I think there's some pressure.
Steve Schindler (28:47):
And also economic too.
I mean, if you think about museums and their being strapped for cash and funds.
Katie Wilson-Milne (28:52):
Yeah, this is an expensive fight.
Steve Schindler (28:54):
This is a very expensive fight, assuming that they're paying the market rates for these law firms, maybe getting a little bit of a discount.
But the work that's being done both on the civil side by the Wilson Sonsini firm and on the criminal side with the McDermott firm, these are big firms doing a lot of work.
Katie Wilson-Milne (29:13):
I think the other thing to keep in mind is that museums' commitments- both in their own collection policies, in the membership organizations they're part of, and their just general commitments- they have committed to taking restitution claims seriously.
So, unless an institution has a really good reason to believe that on the merits, something was not stolen or taken or transacted under compromised circumstances during World War II, you know, they're not going to fight that, right?
(29:44):
Because there's a whole set of commitments that are much more seriously taken now.
So I do think the Art Institute must have a true belief in the merits of these arguments that this work was not stolen, that it stayed in the family, that it was sold by the family after the war, and that the Manhattan DA is overreaching and, you know, not looking at the evidence correctly or carefully, you know, and that there's a real threat to letting these kind of cases go through without forcing that kind of detailed historical analysis.
Steve Schindler (30:17):
Yeah, I think that's right.
And I think, you know, on the criminal case, I think there's the added argument, perhaps, that the Art Institute is, you know, aggrieved by the fact that this law enforcement...
(30:52):
And I think there are legitimate reasons to push back on that.
Obviously, in the civil case, they don't really have that same argument.
Katie Wilson-Milne (31:03):
You know, I think one of the questions we all have about this is, so maybe the Art Institute has a good legal argument.
I don't know, but, you know, they do put forth a very detailed account of all the evidence in a way that the DA's office doesn't, and that Judge Drysdale does not address.
(31:23):
I mean, they really do respond to every single point in the decision.
They already had done that in the briefing, and it's not addressed by her.
But no matter what the facts are, this work, you know, unless Grünbaum sold it before the war, which is possible, but no one's asserting that.
The Art Institute is saying, the most likely scenario is, it survives the war through Lilly's family, right?
(31:49):
So no matter what, in either scenario, this work leaves Fritz and Lilly's possession because of Nazi persecution in Europe, right?
Like, there's no question about that.
So then I think there really is this sort of, it's not technical in the sense that it's a technical legal argument or- but something not right happened here that led to this artwork getting to Switzerland, being sold.
(32:14):
And it's not that the Art Institute did anything wrong, or that anyone after Kornfeld did anything wrong, but it's just this wouldn't have left their family unless they were being persecuted by the Nazis.
And then they died.
They were killed by the Nazis.
And they were left with nothing.
So...
Steve Schindler (32:31):
Right, and if you accept the Washington Principles in their broadest sense, this is a work that is- clearly comes within that, those principles.
Katie Wilson-Milne (32:39):
Yeah.
I mean, I don't know that it would come...
Those principles are obviously rebuttable.
There's a presumption, and what the Art Institute is trying to do is rebut the presumption that any transaction was illicit or unlawful.
And they say it wasn't.
I mean, Lilly voluntarily gave it to her sister.
Her sister had a right to take it.
She left the country with it.
(32:59):
And she sold it.
Steve Schindler (33:00):
Right.
Yes, I suppose they can rebut that.
But any voluntary relinquishment of possession at that point in time, I think is subject to a lot of questions.
Katie Wilson-Milne (33:11):
It's subject to questions, but they're rebuttable, yeah.
Steve Schindler (33:13):
So what happens next?
First of all, we should take this opportunity, because we're going to have to wait now to see what happens in the First Department on the appeal from the criminal case.
And then also, there'll be some further developments in the civil case as well.
It would be great if any of the lawyers who are involved in the case, whether it be from the Manhattan District Attorney's Office or the lawyers in the penal case or the lawyers in the civil case- both from the plaintiff's side on the civil case or the defendant's side- want to come on the podcast, they're hereby invited.
Katie Wilson-Milne (33:47):
Yeah, that would be great.
Steve Schindler (33:47):
And we would love to hear from them.
Katie Wilson-Milne (33:50):
And we can do a fuller episode where we dive in in a lot more detail, both to the story of the Grünbaums and their collection and to the legal elements animating these numerous cases.
Steve Schindler (34:01):
Yeah, but it's here for a while.
Katie Wilson-Milne (34:03):
Yeah.
Steve Schindler (34:04):
All right.
And that's it for today's podcast. Please subscribe to us wherever you get your podcasts, and send us feedback at podcast@schlaw.com. And if you like what you hear, give us a five-star rating. We are also featuring the original music of Chris Thompson.
(34:26):
And finally, we want to thank our fabulous producer, Jackie Santos, for making us sound so good.
Katie Wilson-Milne (34:31):
Until next time, I'm Katie Wilson-Milne.
Steve Schindler (34:33):
And I'm Steve Schindler, bringing you the Art Law Podcast, a podcast exploring the places where art intersects with and interferes with the law.
Katie Wilson-Milne (34:43):
The information provided in this podcast is not intended to be a source of legal advice.
You should not consider the information provided to be an invitation for an attorney-client relationship, should not rely on the information as legal advice for any purpose, and should always seek the legal advice of competent counsel in the relevant jurisdiction.
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