The Art Institute Chicago Schiele Ruling and the Limits of Object-First Enforcement

On Thursday the New York Appellate Division, First Department handed the Art Institute of Chicago a significant win in its long dispute over Egon Schiele’s Russian War Prisoner. Graham Bowley and Tom Mashberg’s report in the Times frames it as a blow to the Manhattan DA’s investigators. I’d go a step further. This ruling lands on the signature feature of the Antiquities Trafficking Unit’s method, which is that it goes after the objects first and worries about the people later.

Egon Schiele, "Russian War Prisoner" (1916), watercolor over graphite on cream paper. It shows the head and hand of a uniformed Russian prisoner of war, with the artist's signature at lower right.
“Russian War Prisoner” by Egon Schiele, via Manhattan District Attorney

To be precise about what the court did: it did not decide that the Art Institute owns the drawing. It didn’t decide that the drawing was looted, or that it wasn’t. It decided that a turnover order under Penal Law § 450.10 was the wrong tool for a sharply contested ownership dispute. The court vacated the warrant and the orders requiring the museum to surrender the work, and it said in terms that its decision shouldn’t be read as a determination of the rightful owner. It sent the title question to the earlier-filed civil case in federal court in the Southern District of New York.

A quick recap

Fritz Grünbaum was a Viennese cabaret performer and an outspoken critic of the Nazis. He was arrested in March 1938 and died in Dachau in 1941. His collection of dozens of Schiele works was inventoried by the Nazis, and then, for the most part, vanished from the record until 1956, when pieces surfaced with the Swiss dealer Eberhard Kornfeld. Some went on to Otto Kallir’s Galerie St. Etienne in Manhattan, and Russian War Prisoner was ultimately bought by the Art Institute in 1966.

The DA’s Antiquities Trafficking Unit took an interest after Grünbaum’s heirs came to them in 2022. In September 2023 authorities in New York seized the drawing in place at the Art Institute, along with two other works in Pittsburgh and Ohio, on the theory that they were stolen from Jewish families by Nazis. The other two institutions, the Carnegie and Oberlin’s Allen Memorial, returned their Schieles in January 2024. The Art Institute did not, and the museum insisted the work was not looted but lawfully sold by surviving family members after the war.

Picture of a man in a suit, black and white, autographed.
Fritz Grünbaum, Österreichisches Theatermuseum, public domain photograph via https://commons.wikimedia.org/wiki/File:Fritz_Gr%C3%BCnbaum.jpg

Meanwhile the heirs’ separate civil suit had been dismissed by Judge Koeltl as time-barred, a ruling he declined to revisit in February 2024. In April 2025, Justice Drysdale sided with the DA. The ruling ran 79 pages and described the drawing as stolen property for the last 86 years. She reached that conclusion without an evidentiary hearing.

Why the appeals court said no

For a first-year-property-class reason, mostly. Section 450.10(5) says stolen property that comes into a court’s custody is to be delivered to the owner “on satisfactory proof of his title.” The Appellate Division reads that as a mechanism for quickly returning property to an obvious owner, not as a way to adjudicate a hotly contested title. The statute doesn’t say who decides title, what procedure applies, or who bears what burden. And the court leaned on a 1913 Court of Appeals decision, People ex rel. Simpson Co. v. Kempner, which said a title dispute between contending parties “must be determined in a civil action,” with notice, a hearing, and a jury if demanded.

The court was also unimpressed by the DA’s description of what happened below as “summary judgment-like.” There were no pleadings, no meaningful discovery, and no defined burdens of proof. And because the turnover orders can’t be appealed directly, the Art Institute could only get review through an Article 78 petition for a writ of prohibition. The court treated a deprivation of property without due process as the kind of clear legal right that makes that extraordinary remedy appropriate.

The object-first model

Here is what I think matters beyond this one drawing. According to the opinion, the DA told the court that New York County judges have signed more than 100 turnover orders, returning more than 4,000 antiquities and artworks. The NY Times reports how those cases typically end: rather than bring criminal charges and face potentially lengthy cases, investigators negotiate agreements, and the holders usually hand over the objects without contesting that they were stolen.

That is an object-centered model, and it has been enormously productive. In its statement to the Times, the DA’s office pointed to the return of more than 6,000 stolen artifacts. But the same statement cites 18 convictions. I don’t want to be unfair about that comparison, because convictions and objects measure different things. Still, it captures a pattern I wrote about after the Worcester seizure : the objects are returning to where they were taken from, but the prosecution of the individuals responsible has lagged well behind.

The object-first approach worked because it let everyone skip the hard part. A holder who cooperates gets no charge, no trial, and a quiet press release. The office gets the object and a headline. Nobody has to prove that a particular person committed a particular crime, and nobody has to adjudicate title. The Art Institute is, so far as I can tell, the rare possessor to refuse the deal and then follow through on the refusal, all the way to a writ of prohibition. The opinion also notes that the DA brought no criminal charges in connection with the work.

Why Schiele works are so contested

This is the part I think a general audience finds most interesting, and the reasons pile up.

First, the objects are portable and the paper trail is thin. Schiele’s works on paper are small, easy to move, and were easy to lose track of in the mass spoliation of 1938 to 1945. The Nazi inventory of Grünbaum’s property listed 81 Schiele pieces but, as the court notes, did not list Russian War Prisoner by name. Identifying a specific drawing with a specific line in a wartime inventory is a big part of the fight.

Second, there is a gap and a story to fill it. Nothing is documented between 1938 and 1956. Kornfeld filled it by saying he had bought the works from Grünbaum’s sister-in-law, Mathilde Lukacs. The Appellate Division in Reif v. Nagy did not credit that account, and this opinion recites why: no documentation of a transfer, no mention of Lukacs in earlier catalogues, and a claim made decades after the fact. The Art Institute still relies on the Lukacs account, as does the museum’s position that the family lawfully sold the work. That account has worked before: in Bakalar v. Vavra, the heirs lost a case involving a different Grünbaum Schiele on laches grounds, which is a reminder of how much turns on which court you’re in and which doctrine is doing the work.

Third, the money. The Grünbaum heirs sold six Schieles at Christie’s in fall 2023, and four of them collectively fetched $18 million. That helps explain both why heirs pursue these works so persistently and why holders defend them so hard.

Fourth, the New York connection. Kallir’s Manhattan gallery handled a good number of these works after the war. That’s what gives a New York prosecutor a jurisdictional hold on a drawing that sat in Chicago for sixty years, and it is exactly the connection the Art Institute has challenged.

Finally, the Art Institute’s own conduct. The opinion recites that there’s no record of a provenance check in 1966, and that in 2002 a museum intern asked Kornfeld about the work and there is no record the museum ever tried to independently verify his answer. The Second Circuit, when it revived the civil suit in March 2025 in a non-precedential summary order, said the Art Institute isn’t an ordinary non-merchant purchaser but a sophisticated one with expertise in Nazi-looted art. Nothing in this week’s decision undercuts that.

The reaction

The museum welcomed the ruling, telling the NY Times that the court rejected an unlawful attempt to use the criminal process to resolve disputed property rights, and that the matter belongs in civil court. The DA’s office said it is reviewing the decision and evaluating next steps. Two museum groups, the Association of Art Museum Directors and the American Alliance of Museums, had filed a joint brief supporting Chicago.

Nicholas O’Donnell, who represented a family that turned over another artwork in 2024, told the NY Times the decision “sharply reduces the D.A.’s ability to pursue the seizure of cultural property.” As the NY Times summarizes his view, owners accused of holding stolen art could now decline to hand it over unless a criminal case is brought, a crime is proven, and title is fully adjudicated. Raymond Dowd, who represents one of the Grünbaum heirs, sharply criticized the reasoning, comparing the objects to contraband that police can seize the way they seize drugs or drug money. Legal experts told the NY Times it is unlikely that holders who already returned works would try to reopen those seizures.

The ruling doesn’t just slow the DA down. It changes the price of contested cases. Where a holder disputes title, the shortcut is closed, and the office has two choices: bring a criminal case against someone, or send the claimants to civil court. That pushes toward what I’d argue was always the harder and more important work, which is investigating and prosecuting the dealers, middlemen, and facilitators who moved this material.

That work has its own problems. In the Schiele story, the central figures are dead. Kallir died decades ago, and Kornfeld is described in recent reporting as the late dealer. The trial court itself noted that every witness with first-hand knowledge of the wartime events had died. You can’t indict a dead man, and a “continuing conspiracy” theory of the kind the trial court accepted is a long way from a case a prosecutor can try. Proving a crime against a living person means proving what that person knew, and gaps in provenance, however damning they look to us, are not the same thing. So for Nazi-era claims like this one, the civil courts really may be the only place a resolution is possible, which is more or less what the Appellate Division said.

The picture is different for the antiquities trade the unit built its reputation on. There, the dealers, collectors, and trusts are often alive, the records are more recent, and the networks are the story. If the office is now pushed away from the easy object-first seizure, the question is whether it has the appetite and the resources to build cases against people. I hope so. The illicit market runs on the individuals who supply, launder, and buy them.

There is a fair case on the other side, too. Dowd’s point deserves a serious answer: police do seize contraband without a trial, and a museum drawing with a disputed, decades-old chain of title is arguably not the same thing as a looted Cambodian statue. Voluntary returns will also presumably continue. Many holders return works because they don’t want the fight, not because a statute compels them, and nothing in this ruling stops that. And it’s possible that the unit will simply reach for other tools. The DA said only that it is evaluating its next steps.

Procedurally, the Appellate Division stayed enforcement for 30 days, and the grand jury investigation can continue. The action that matters now is in federal court, where the case has been stayed pending this decision. There the parties will have what the Appellate Division said was missing: discovery, defined burdens, and a real fight over the evidence. For the heirs, who have waited nearly two decades, that is at once a setback and a chance to finally litigate the merits.

I’ll be watching for whether the next big move from Manhattan is another seizure, an appeal or something else. And nothing here would prevent the parties from coming to some kind of truce and settling their dispute outside of court.

Many thanks to the reporters who’ve followed this for years, especially Graham Bowley and Tom Mashberg at the Times, and The Art Newspaper.


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Commentary and analysis

An End in Sight to Portrait of Wally Forfeiture?


Martha Lufkin of the art newspaper summarizes the nearly 10-year-long dispute between Federal prosecutors, the Bondi family and the Leopold Museum in Vienna. For past posts on the long-running dispute over this work see here.

Lufkin also reports Federal prosecutors have asked that a judgment to be postponed to allow the review of some new evidence:

Judgement on a long-running lawsuit in New York, which helped launch a world outcry over Nazi-looted art at museums and prompted many institutions to begin examining their collections for history of Nazi theft, has been postponed to let the US government review new evidence. On 3 June the schedule was suspended on a case brought by the US government in 1999 to seek confiscation of Egon Schiele’s Portrait of Wally from the Leopold Museum in Vienna, under the US National Stolen Property Act. The US says the Leopold knew that the art was stolen by a Nazi in 1939 from its Jewish owner, Lea Bondi. The case, which the parties had asked the court to resolve without a trial, is before the federal district court in Manhattan.

Questions or Comments? Email me at derek.fincham@gmail.com

Germany Creates a Restitution Commission

Germany has decided to create a kind of Nazi Spoliation Office. From the AP:

BERLIN (AP) — A new office within Germany’s Institute for Museum Research is opening in January to help identify and research art stolen by the Nazis, Germany’s culture minister said Wednesday.

The office, which comes under the State Museums of Berlin, will help museums, libraries and archives identify items that were taken from their rightful owners during the Nazi period, Culture Minister Bernd Neumann said.

“I expect from this an important push in Germany in the clarifying of restitution questions,” he said.

Neumann founded a working group to look into how to deal with restitution issues, after Berlin sparked controversy with a decision last year to return Ernst Ludwig Kirchner’s “Berlin Street Scene” to the heirs of a Jewish collector who said the Nazis forced the family to sell it in the 1930s.

Some art experts questioned whether the expressionist work was sold under duress and whether its return was legal.

With the new office, which has a $1.47 million annual budget, Neumann said he hoped the restitution process would be better coordinated and more transparent.

This appears to be a good idea, and perhaps will preclude the need for private legal disputes when, for example, these works are displayed abroad as is the case with Schiele’s Portrait of Wally. Will this commission help to return works to claimants? Offer settlements? Or, will it instead merely warn German institutions that certain objects are suspect and should not be loaned abroad?

Questions or Comments? Email me at derek.fincham@gmail.com

"Portrait of Wally" and Nazi Spoliation Litigation

Over at Culturegrrl, Lee Rosenbaum has some interesting information on Egon Schiele’s Portrait of Wally which has been sitting in storage for about 8-9 years now pending litigation. Two other articles on this topic have appeared in the last week as well. Carol Kino has an article in the NY Times on this as well. Kelly Crow had an article ($) in last week’s Wall Street Journal as well.

Here’s what Rosenbaum had to say on “Portrait of Wally”:

“Wally” is still languishing in storage, but not at MoMA. Having been seized by the U.S. Customs Service, it is now in a warehouse run by the Department of Homeland Security. According to MoMA’s deputy general counsel, Stephen Clark, “No trial date [at U.S. District Court in Manhattan] has been set.”

The Times reported that New York art-restitution attorneys Lawrence Kaye and Howard Spiegler are “helping the heirs” of the Viennese dealer in their effort to recover the Schiele painting from the Leopold Museum, Vienna, which had lent it to the MoMA show. The heirs assert that it had been confiscated from Jaray by the Nazis and should be returned to the family.

Spiegler told CultureGrrl today that an effort early last year at mediation in the case had failed, but he was hopeful that the matter would be resolved in court by “the end of this year or the beginning of next.”

Well, let’s hope that is the case. Rosenbaum blames the law for this extended delay, and that’s right in a sense. This painting was seized under a civil forfeiture statute. The relevant federal prosecutor seized the work years ago, but the judicial machinery has been incredibly slow. I write about this at length in my article for the Cardozo Journal of Art and Entertainment law which should appear sometime next fall. Jennifer Anglim Kreder had an outstanding article on this dispute, and civil forfeiture a couple of years ago in the Vanderbilt Journal of Transnational Law. I think this is a topic which warrants some more discussion, so I’ll revisit it later this week when I have more time.

In the meantime, you can see what I’ve written on the “Portrait of Wally” dispute.


Questions or Comments? Email me at derek.fincham@gmail.com

Egon Schiele Litigation

There was an interesting article by Jason Horowitz of the New York Observer this week discussing a lawsuit implicating an Egon Schiele drawing. The dispute involves a Schiele drawing which was owned by a Jewish singer and comedian, Fritz Grunbaum. The works were seized by the Nazis, though the work eventually ended up in the hands of the Nazis. The work at issue is,

a gouache-and-black-crayon drawing of a headless woman clutching her knee. It has meandered for decades through art galleries and private collections before ending up in the middle of a pitched legal battle in New York’s Southern District court, where two of Grünbaum’s heirs—Leon Fischer, a New York stamp dealer, and Milos Vavra, who lives in Prague—have bickered for two years with the drawing’s owner, David Bakalar.

Now, a key Swiss gallery owner is prepared to give a deposition for the first time about the drawing’s provenance, and the presiding judge has expressed his eagerness to resolve the case.

At the same time, the heirs’ New York lawyer, Ray Dowd, is weighing the potentially momentous step of going after the Viennese company Schenker & Co. A.G.

Schenker’s global network of shipping firms amounts to one of the world’s largest logistics companies, with more than 40,000 employees in dozens of countries and more than $10 billion in turnover a year. Mr. Dowd contends that the company, which serves as the Olympic Games’ official movers, stole the drawing and set in motion a litany of fictitious provenances that skip from Vienna to Brussels, from Bern to New York.

The whole factual background is quite detailed, and too intricate to delve into here. The attempt to implicate the wing of the American Schenker Corporation seems quite difficult, especially as it was not formed until 1947.

Though there have certainly been some very positive results in Nazi restitution cases, Picasso’s Femme en Blanc is one example, not all the litigation in this area has produced positive results. Consider the case of another Schiele work, Portrait of Wally (pictured above) which was seized in a civil forfeiture action by federal prosecutors. I’m currently looking at this case for an article I am preparing. Based upon my initial research, it appears as if the work is still locked in storage at the Museum of Modern art. If anyone has any information on the present disposition of the dispute, I would really like to talk about it.

Here is my present understanding of the case. Nearly nine years on, the Portrait of Wally litigation has still not managed to reach the substantive issues of the case, and the work remains in storage in the New York Museum of Modern Art in a tragic echo of the fictional Jarnydyce v. Jarndyce in Charles Dickens’ Bleak House.

At present, a new trial will likely ensue to determine if the painting was stolen under the relevant Austrian law. Some time before 1938, Egon Schiele’s Portrait of Wally was housed in the apartment of a Jewish gallery owner, Lea Bondi Jaray “Bondi”. In April 1938, Friedrich Welz acquired the gallery belonging to Bondi in a process called “aryanization”, in which Jews were forced to sell their property at extremely low prices. Welz was later interned by the US military on suspicion of war crimes, at which point it confiscated his possessions, including the Portrait of Wally. Then, as per its post-war military policy, the military returned the property to the government of Austria, not the individuals to whom the property may have belonged prior to its seizure.

The work then was then mistakenly included in a shipment to another dispossessed family. Bondi, who had since fled to London, then allegedly enlisted Dr. Rudolph Leopold to recover the work from the Belvedere Gallery, the purchaser of the work. Later, Leopold acquired Portrait of Wally for himself from the Belvedere, without Bondi’s knowledge. After later learning of Leopold’s possession of the work, Bondi hired an Austrian attorney, but she was unable to recover the work before her death in 1969. Leopold then sold the work to the Leopold, the museum in which he serves as the Director for life.

The dispute remained dormant until 1997, when the Leopold Museum-Privatstiftung (Leopold) presented the work to the New York Museum of Modern Art (MoMA) for a temporary exhibition. After the exhibition, the Manhattan District Attorney’s Office subpoenaed the painting. That subpoena was quashed initially by the New York Court of Appeals because it violated New York’s anti-seizure statute. That same day a Federal Magistrate Judge issued a seizure warrant for the work based on probable cause that Dr. Leopold, had violated the NSPA. The painting has been in storage since the beginning of the dispute in 1998, while the value of the “Portrait of Wally” has soared to between $5 and $10 million.

Many argue this dispute has had a chilling effect on international art loans. As art adviser Ashton Hawkins says,

I think that people who would have previously considered lending now simply don’t consider it…I know from my colleagues who arrange these exhibitions in New York and in other cities that lending to the United States and particularly to New York has been more of a problem than it used to be.

Glenn Lowry, the director of the MoMA had a similar view testifying before the House Committee on Banking and Financial Services in 2000, “[Portrait of Wally] had been exhibited around the world for decades and … had been reproduced frequently in books.”

The case stands as a cautionary tale of what can happen if we extend restitution litigation too far. The clear cases of theft and loss are easily handled. But when you talk about a series of owners, some with varying degrees of knowledge and bona fides, I think there is a very grave risk of injustice being done. After all, this kind of litigation has three victims: the original owner, the present good faith possessor, and the public who may not be able to have access to the work. If anyone has any information about where this Portrait of Wally litigation currently stands, I would be delighted to hear it.

(Correction: earlier today I incorrectly labelled the publication as the NY Sun, rather than the actual publication, The New York Observer. I’ve corrected my error.)

Questions or Comments? Email me at derek.fincham@gmail.com