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New York museums retain disputed Picassos in settlement

Last Updated: Monday, February 2, 2009 | 4:24 PM ET Comments3Recommend9

CBC News

According to the settlement, the Museum of Modern Art will retain Pablo Picasso's Boy Leading a Horse. (Franka Bruns/Associated Press)

Two prominent New York museums have reached a settlement with the heirs of a German-Jewish banker over a pair of Picasso paintings.

On Monday, as the trial over the disputed artwork was slated to begin, lawyers for Julius Schoeps, and for the Museum of Modern Art (MoMA) and the Solomon Guggenheim Foundation instead revealed to Manhattan Federal Court Judge Jed Rakoff that both sides had reached a settlement.

Other than saying that the two museums would retain the Cubist master's Boy Leading a Horse (held by MoMA) and Le Moulin de la Galette (held at the Guggenheim), they shared few details.

However, Rakoff urged both sides to reveal the terms of the settlement, setting a 30-day deadline for an explanation of why the deal should remain confidential.

The two paintings were formerly owned by German banker Paul von Mendelssohn-Bartholdy, Schoeps's great-uncle. Mendelssohn-Bartholdy died in 1935, after Adolf Hitler rose to power.

At issue was whether, before his death, the banker and art collector sold the two paintings in question to Jewish art dealer Justin Thannhauser (to protect his collection from the Nazis) or whether he simply consigned them to the Berlin dealer.

Thannhauser later fled Germany. He sold Boy Leading a Horse to then-MoMA chair William Paley in 1936 and gifted Le Moulin de la Galette to the Guggenheim museum in 1963.

In 2007, Schoeps and other heirs of Mendelssohn-Bartholdy demanded the paintings be turned over, while the two museums launched legal action to confirm their ownership of the paintings.

Schoeps lost a previous lawsuit involving another of his great-uncle's Picasso paintings.

In 2006, he failed in his attempt to block an auction of Portrait de Angel Fernandez de Soto, which had also been sold by Thannhauser in the 1930s.

With files from the Associated Press