Sotheby's Sued Over Nazi Owned Art - Questions Remain if it was Looted

A collector is suing Sotheby's for an old master painting which was once owned by Nazi Hermann Goering and it may have been looted.  The Art Newspaper is reporting the current owner purchased the painting from Sotheby's in 2004, and now it is worthless.  The current owner claims that Sotheby's should have researched the painting and informed buyers of its past.

One of the more interesting aspects of the case is there is no proof the painting was in fact looted, just a possibility.  That possibility is enough to question the title of the painting and to harm its future sales potential according to the plaintiff.

The Art Newspaper reports

A collector of Old Masters says that a painting he bought from Sotheby’s in 2004 is now worthless because it was once owned by the war criminal Hermann Goering and might have been looted by the Nazis, according to a lawsuit filed in California on 21 March. The Goering connection came to light in 2010, when Steven Brooks, the owner of the painting, sought to sell it at Christie’s. The auction house’s specialists found that Goering had bought the work in 1939. Christie’s refused to auction the work and, the complaint alleges, Sotheby’s will neither auction it nor refund Brooks’s money.

Brooks alleges that Sotheby’s should have researched the provenance of Allegorical Portrait of a Lady as Diana Wounded by Cupid, by the 18th-century French artist Louis-Michel van Loo, and says that the auction house should have informed potential buyers at the London auction that the work had been owned by Goering. Brooks paid £57,600 for the work in 2004.

The Nazi connection, the lawsuit says, creates “a cloud on title”—uncertainty over who is the rightful owner—that renders the painting unsaleable and without value.

Unusually, there is no proof that the work was looted—just uncertainty—and no claimant or potential claimant has been identified. Steven Thomas, an art law expert at Irell & Manella (who is not involved in this case), expects Sotheby’s to fight the case, to establish a precedent in this new area, rather than settle it. It is almost unheard of in Holocaust-related litigation to say that “there’s a cloud [on title] when there’s not a claimant”, he says. “That the painting was owned by Goering doesn’t mean it was looted.”

The case could clarify “the responsibility of a major auction house with respect to knowing what it sells before it sells” and if “collectors can have an expectation of minimal due diligence prior to [such auction houses] putting a work on the market”, says Brooks’s lawyer, Thomas LoSavio of Low Ball & Lynch.

Source: The Art Newspaper

Aris, the art title insurance broker reported the following on the suit

ARIS Commentary: The van Loo matter highlights for the first time through litigation the thorny issues of marketability, title and valuation of works for which there is uncertainty as to Nazi looting or dispossession and no identifiable claimant or claim; an increasingly common dilemma. Similar issues have plagued orphaned antiquities, which lack documentation proving legal export and ownership outside of source countries before 1970 (or earlier under specific country's cultural property laws). The good faith sell-side of the art market has struggled with how to manage the trade of "orphaned works" to satisfy the good faith demand-side of the market.