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Pastimes : Investing and collecting ART

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From: Jon Koplik11/6/2013 2:28:00 PM
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WSJ -- Cache of Nazi-Seized Art Discovered in Munich Apartment ..............................

Nov. 4, 2013

Cache of Nazi-Seized Art Discovered in Munich Apartment

Works by Artists Including Matisse, Picasso Estimated to Be Worth About €1 Billion

By Mary M. Lane and Harriet Torry

BERLIN -- ­German authorities discovered a trove of about 1,500 missing works confiscated by the Nazis in the trash-filled apartment of an elderly Munich man, in a spectacular discovery of lost treasure that reverberated across the art world.

The works, by artists including Picasso, Matisse and Chagall, among others, are estimated to be worth about €1 billion ($1.35 billion), according to a preliminary analysis for authorities undertaken by an expert at Berlin's Free University.

Details of the discovered works remain unclear, but art historians said initial descriptions suggest that the cache is one of the most significant collections of prewar European art in the world. Determining the rightful owners of the works decades after they were either sold under duress or seized could take years, however.

German customs officials made the discovery in the spring of 2011 and have been trying to determine its provenance and value, according to German weekly Focus magazine, which reported the find on Sunday.

The apartment where the art was discovered was the residence of the son of a well-known, though long-deceased Nazi art dealer, the magazine reported. The son, identified by the magazine as 80-year-old Cornelius Gurlitt, is under investigation for tax evasion, it said. Mr. Gurlitt couldn't be reached to comment. A spokesman for the prosecutor's office declined to comment.

The collection is thought to have been amassed in the 1930s and 1940s by Mr. Gurlitt's father, Hildebrand. The senior Mr. Gurlitt was a museum curator-turned-art dealer who, despite having a Jewish mother, was one of a handful of art dealers commissioned by Joseph Goebbels's Nazi propaganda ministry to rid German museums and galleries of "degenerate" art confiscated by the regime.

Because of Hildebrand Gurlitt's contacts abroad, the Nazis instructed him to sell the art overseas to raise money for the Reich. He was also involved in an effort to amass great works for a museum planned for the city of Linz, the Austrian city where Hitler had spent much of his youth and which he wanted to transform into the Reich's cultural center.

The senior Mr. Gurlitt's personal collection was thought to have been destroyed along with his house during a World War II bomb attack on Dresden, and he died in a car crash in 1956.

Observers both in and outside the art world criticized the German government for remaining silent about the discovery for so long, given the historic ramifications of such a discovery.

Rüdiger Mahlo, German representative for the Conference on Jewish Material Claims Against Germany­ -- which seeks compensation and restitution for survivors of the Holocaust­ -- said the two-year silence about the trove "underscores [the fact that] a lack of transparency often accompanies the restitution of art and cultural treasures."

A person familiar with the investigation said the secrecy surrounding the probe and its discovery was necessary because it involved allegations of tax evasion. Under Germany's strict privacy laws, authorities are prohibited from disclosing the details of such investigations.

Chancellor Angela Merkel's office was informed of the case months ago and has been assisting investigators in finding experts to evaluate the works, her spokesman said. Berlin's Free University, which is assisting in evaluating the art, acknowledged its role but said that it couldn't comment further.

A spokesman for the district attorney in the city of Augsburg, which is handling the probe, said the office didn't comment on ongoing investigations. A spokesman for the customs office in Munich declined to comment.

Meike Hoffmann, a Free University specialist in Nazi-condemned art who is the lead researcher involved in evaluating the trove, has for months been using the Art Loss Register, an international database used to track stolen and missing art, to begin the lengthy process of determining ownership of the works, according to a person familiar with the matter. Ms. Hoffmann didn't respond to requests to comment.

German customs officials stumbled onto the case by chance in 2010, following a routine check of Mr. Gurlitt's belongings on a train from Switzerland to Munich, according to Focus. During the check, they found €9,000 in cash. The sum was below the €10,000 threshold that travelers are required to declare, but the discovery prompted the custom authorities to investigate Mr. Gurlitt further. Months later, in the spring of 2011, authorities discovered the lost works in his Munich apartment.

Though German authorities seized the works, which the magazine said had been stored in trash-strewn rooms amid decades-old canned food, Mr. Gurlitt managed to sell at least one more work at auction after the discovery, according to the Cologne-based boutique auction house Lempertz, which managed the sale.

Mr. Gurlitt approached Lempertz with the "Lion Tamer," a work by the German Expressionist artist Max Beckmann, which he had kept hidden during the German government's raid several weeks before, according to the auction house.

"He said his mother had given him the work," said Carsten Felgner, the provenance researcher at Lempertz who worked on the sale.

As is common in potentially thorny cases involving work acquired during World War II, Mr. Felgner contacted the family of Alfred Flechtheim, the work's original owner who had been a prominent collector. Given the uncertainty over who had a legal claim to the work, the auction house reached a deal to split the profits of the €864,000 Beckmann work between the Flechtheim family, Mr. Gurlitt and the auction house itself, according to Mr. Felgner.

A person who coordinated with Mr. Gurlitt on the sale at Lempertz described him as "friendly and charming" and said no one at the auction house "suspected a thing." An employee who visited Mr. Gurlitt's house said nothing out of the ordinary was seen at his residence.

Auction managers were surprised to learn from news reports that Mr. Gurlitt was under investigation. "No one from the government ever came to us or alerted us about him. What does it say about the federal prosecutors that they didn't feel the need to alert the auction houses?" Mr. Felgner said.

Representatives from Villa Griesbach in Berlin and Vienna-based Dorotheum, two similar boutique houses that often sell German and Austrian works similar to the Beckmann, both declined to comment on whether Mr. Gurlitt approached them with work to sell.

According to Focus, around 300 of the works were among the 19,500 works labeled "degenerate" by the Nazi regime. Many of the other pieces, including works by the German painter Albrecht Dürer, weren't banned, but their provenance is unclear.

A complete catalog of the works in the trove hasn't been disclosed. But works by Picasso, Matisse and Chagall­ -- artists whose works Hitler, who was an amateur artist in his youth, derided­ -- were among them.

"Artworks that cannot be understood in and of themselves­ -- but first require a user's manual in order to finally find those intimidated people who patiently accept such stupid and impudent nonsense -- ­will no longer find their way to the German people," Hitler said of the term "degenerate," though even his own art historians had difficulty deciding what art to ban.

Such work was collected by German museums and prominent collectors in the 1920s and 1930s, said Olivier Berggruen, a New-York based art historian whose Jewish father, Heinz Berggruen, left Germany to become one of the world's most prestigious art dealers of Matisses and Picassos after the war.

"The vagaries of the war were such that a lot of Picassos, Matisses and Klees, too, changed hands many times," including some that also were looted by Russians, Mr. Berggruen said.

Because German museums owned many works by these artists­ -- and it is unclear whether they obtained all of them fairly or through coercion­ -- restitution could be a lengthy and ambiguous process.

Last year Munich's Neue Pinakothek held an exhibition of 16 sculptures of "degenerate" art unearthed by construction workers digging near Berlin's Rathaus, or city hall. Those works are now property of the German state, the conclusion to a "relatively quick" investigation by art historians, said Matthias Wemhoff, who directed the excavation and restoration of the works. Those works had been presumed lost, but had been well-documented, which doesn't seem to be the case for the newly discovered trove, he said, adding that it could take years for Free University historians to determine their rightful owners.

"It is so unclear who has the rights to these works," Mr. Wemhoff said.

Many of the works are most likely editions of prints or works on paper, which will make determining their values even more difficult, experts say.

Because of their popularity even before the war, most masterpieces by Picasso and Matisse are accounted for, Mr. Berggruen said.

The few top works by artists that have turned up, been restituted and subsequently auctioned off have consistently seen major­ -- often record-breaking­ -- success. In 2008, amid an otherwise crashing art market, "Suprematist Composition," a restituted 1916 work by Russian avant-garde painter Kazimir Malevich, was sold for $60 million at Sotheby's, setting a world record for Russian art.

A Christie's New York sale in November 2006 of four works by Gustav Klimt­ -- which had been involved in a legal dispute between the Austrian government and the family of their original owner -- totaled $193 million, including the sultry "Portrait of Adele Bloch-Bauer II" for $87.9 million.

But even works with relatively modest value in terms of their artistic quality could fetch substantial prices at auction because of the story attached to their discovery, he said.

"It is a nice story, and a lot depends on the marketing ability of the people who sell it," he said. "If it's spun in the correct way by the auction houses, they could get a nice sum for them."

Write to Mary M. Lane at mary.lane@wsj.com and Harriet Torry at harriet.torry@wsj.com

Copyright © 2013 Dow Jones & Company, Inc.

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