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$6.5 million settlement to heir for stolen Picasso

Chicago collector agrees to pay claimant to gain title to the work

Los Angeles. The grandson of a Jewish woman whose Picasso painting was stolen by Nazis during World War II is to receive $6.5 million compensation from American collector Marilynn Alsdorf, who bought the work from a gallery in 1975. Ms Alsdorf will keep the painting, Femme en blanc (about 1922), which has been the subject of three lawsuits in the past three years. Both parties assumed the painting to be worth $8-10 million and the settlement represents 65-80% of this value.

Mrs Alsdorf, who is 80, maintains that she bought the work in good faith with proper legal title. But she agreed to the settlement citing her advanced age and the need to resolve financial claims so that her commitments to family and charitable organisations can be completed.

In 2002, Thomas Bennigson, grandson and sole heir of the painting’s original Jewish owner, Carlota Landsberg, sued Mrs Alsdorf in California State court for return of the work, having been informed by the Art Loss Register (ALR) that as Landsberg’s heir, he owned it. Mrs Alsdorf then brought a separate suit in Illinois State court, seeking a declaration that she owned the art. In 2004, the US Government entered the dispute by bringing a forfeiture lawsuit in Los Angeles federal court, seeking to confiscate the art as stolen goods which had been illegally shipped across State lines.

In the confiscation suit, the US cited an alleged violation by Mrs Alsdorf of the National Stolen Property Act (NSPA). The NSPA bans the transportation of stolen goods across State lines with knowledge that they are stolen. The government argued that before Mrs Alsdorf shipped the painting in 2002 from Los Angeles to Chicago, representatives from the ALR had advised her lawyer and her art dealer that Nazis had stolen the painting in Paris during the Holocaust era.

The case appears to be the first instance in which a government suit seeking to confiscate stolen art was grounded on an allegation that the owner knew the art was stolen because the ALR informed her of its finding that it was. Mrs Alsdorf argued that the New York dealer who sold her the painting held valid title. The ALR, which maintains a database of art stolen in the Nazi era, became involved when it was contacted for a due diligence check by a potential buyer of the painting, which Mrs Alsdorf had sent to Geneva in January 2002 for possible sale.

Mrs Alsdorf will make payment to Mr Bennigson after the California federal court which is hearing the government’s case enters a consent judgment that she holds incontestable title to the painting. The Illinois and California lawsuits will then be dismissed. The parties reached the settlement agreement after discussion and negotiation on 13 June, moderated by US Magistrate Judge Margaret A. Nagle of the US District Court for the Central District of California.

Mr Bennigson was represented by E. Randol Schoenberg, of the law firm Burris & Schoenberg LLP, Los Angeles. Mrs Alsdorf was represented by Richard H. Chapman and David M. Rownd of the law firm FagelHaber, LLC, Chicago.

John E. Lee, Assistant US Attorney for the Central District of California, attended the negotiation and concurred that the settlement agreement resolved the issues in the government’s case.