Descendants sue Germany and Prussian Cultural Heritage Foundation for $250 million Welfenschatz

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Germany sued to return Welfenschatz collection

Descendants of a Jewish group of art dealers have sued the Germany government and the Prussian Cultural Heritage Foundation to ask them to return a collection of medieval works worth more than $250 million.

The case concerns the so called Welfenschatz or Guelph Treasure that was owned by a group of Jewish art dealers before becoming part of Adolf Hitler’s private collection. The Welfenschatz is now held by the Prussian Cultural Foundation. It was given a national cultural heritage designation last week.

Nicholas O’Donnell, a partner at Sullivan & Worcester, filed the case on behalf of his clients Gerald Stiebel, who lives in Santa Fe, and Alan Phillip, who lives in London. Markus Stötzel, founder of German firm, Markus H. Stötzel is German counsel and has acted for Stiebel and Phillip for several years.

Stiebel and Phillip are direct relatives of a consortium of Jewish art dealers who bought the Welfenschatz collection – or Guelph Treasure – in 1929, just before the start of the Great Depression. The collection comprises of gilded and jewelled religious artefacts from the 11th to 15th centuries that belonged to the Prussian House of Brunswick-Luneberg. The Duke of Brunswick sold a large part of it to a group of dealers: J & S Goldschmidt, I. Rosenbaum, and Z.M. Hackenbroch. In 1933, after exhibiting the collection in the US, the dealers sold about half of the items they owned.

“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.”

The case rests on whether a second sale in 1935 was a fair one. Stötzel says it was not: “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.”

The filing includes documents to support this argument. One is a letter from the Mayor of Frankfurt, to Adolf Hitler, taking about the about the potential to take advantage of the Welfenschatz’s owners. Paul Körner, a Nazi leader, also wrote about how to take the collection. Herman Goering eventually gave it to Hitler.

The descendants and the foundation entered into mediation in 2014. The German restitution Advisory Commission – often known as the Limbach Commission after former Supreme Constitutional Court judge Jutta Limbach – said it could find no proof that they were forced to sell.

In its report the Commission said: Although the Commission is aware of the severe fate of art dealers and their persecution in the Nazi era, there are no indications that suggest that the art dealers and their business partners in the case to be assessed by the Commission were under duress—even from Göring; in addition, one had to deal with the effects of the global economic crisis in 1934/1935.”

Writing on his Art Law Blog, O’Donnell said that this judgement was wrong.

“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,”

“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.”

“Germany advances the pretence that it has enacted procedures to address Nazi-looted art, but the reality is quite different,” said O’Donnell. “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 descendants are arguing that the case should be held in the US under the Foreign Sovereign Immunities Act (FSIA) – which covers stolen property. O’Donnell also argues that the 1933 exhibition means that the collection has a connection with the US. The foundation and the German government also have business activities in the US.

“The Welfenschatz is my clients’ property and has been for decades. We now intend to use the full weight of the American justice system to prove that.”

“As a result of a failure of justice here in Germany, my clients have asked me to vindicate their rights in the federal courts of the United States of America,” says O’Donnell. “The Welfenschatz is my clients’ property and has been for decades and we now intend to use the full weight of the American justice system to prove that. We look forward to the day when it is back in their rightful possession.”

Full filing