The heirs of Paul von Mendelssohn-Bartholdy – a prominent Berlin Banker of Jewish descent who suffered Nazi persecution – announce that they have filed suit against the German State of Bavaria in the U.S. District Court for the Southern District of New York to recover an iconic oil painting by Pablo Picasso, entitled Madame Soler (1903) from the artist’s “blue period.” (See Julius H. Schoeps, et al. v. State of Bavaria, 1:13-cv-02048-UA.)

The Mendelssohn heirs base their claim upon well-developed historical facts, the bona fides of which the federal court in Manhattan credited several years ago in a closely related case. (See Julius H. Schoeps, et al. v. Museum of Modern Art, 594 F. Supp.2d 461, 466 – S.D.N.Y. 2009).

1. Paul von Mendelssohn-Bartholdy’s loss of Madame Soler due to Nazi persecution

The Nazis took power in Germany on January 31, 1933 with a transparent agenda to exclude Jews – and Jewish banks and bankers especially – from the economy of Germany and to compel them to forfeit their property. Paul von Mendelssohn-Bartholdy was an immediate target of the Nazi regime given his prominence, wealth and social standing. The Mendelssohns were Germany’s most prominent Jewish family. The famous composer Felix Mendelssohn was a family member, as was Enlightenment philosopher Moses Mendelssohn. Mendelssohn & Co. bank, established in 1795, was one of the five largest private banks in Germany.

By October 1934, Nazi policies and predation had obliterated the value of Mendelssohn-Barthtoldy’s 22% equity interest in Mendelssohn & Co., causing his income to plummet from about 430,270 RM in 1932 (the year before the Nazis took power in January 1933) to only 59,374 RM in 1934. So in less than two years Nazi policies had diminished Mendelssohn-Bartholdy’s income by a staggering 86%. In 1934, Mendelssohn-Bartholdy’s annual alimony expense alone more than doubled his diminished income. By negating the value of Mendelssohn-Bartholdy’s primary asset, Nazi policies and pressure compelled him to seek liquidity from alternative sources.

Mendelssohn-Bartholdy’s superlative private art collection, established over many years beginning in the early 1900’s, was one of his most significant assets and represented the only source of liquidity available to him to respond to his escalating negative cash flow deficit. Mendelssohn-Bartholdy’s collection was comprised of about 60 master works by luminaries such as Picasso, van Gogh, Braque, Monet and Renoir, among others.

Between September 1933 and February 1934, Nazi persecution compelled Mendelssohn-Bartholdy to sell or consign some 16 of these master works – including Madame Soler – having never even attempted to sell a single major artwork in the previous 25 years. The Mendelssohn heirs maintain that the loss of Madame Soler represented a signal milestone along a path that Nazi authorities meticulously engineered to marginalize Jews and deprive them of their property which facilitated later mass genocide.

2. Bavaria’s 1964 purchase of Madame Soler in New York

In 1964, the Bavarian State Paintings Collection (“BSPC”) purchased Madame Soler in New York City from art dealer Justin Thannhauser who had taken possession from Mendelssohn-Bartholdy in 1934. Former Nazi party member and the incoming director of the BSPC Halldor Soehner represented Bavaria in the purchase. Even though Soehner knew that Mendelssohn-Bartholdy had owned Madame Soler – and was expressly aware of the painting’s “Jewish Provenance” – he failed to ask Thannhauser the reasonable questions that the circumstances demanded: From whom did Thannhauser acquire Madame Soler? When did Thannhauser acquire it? What, if anything, did Thannhauser pay for it?

3. Bavaria’s current refusal to restitute Madame Soler, or even to apply to this claim its own prescribed criteria for Holocaust era restitution cases

In 2009, the Mendelssohn heirs sought restitution from the BSPC for Madame Soler. Notwithstanding its awareness of the clear evidence of a forced transfer from Mendelssohn-Bartholdy set forth above, the BSPC refused the exhaustively documented claim of the Mendelssohn heirs to return Madame Soler. Moreover, the BSPC failed to apply to this claim the criteria that it and other German states had specifically prescribed to resolve such controversies and which were expressed in a Common Statement as well as related Guidelines. In addition, the BSPC refused the request of the Mendelssohn heirs to submit their claim to the German Limbach Commission, which the German federal government and its constituent states established specifically to hear claims for the recovery of Nazi era artworks and to decide these claims in a non-binding, equitable and fair manner. Accordingly, the BSPC gave the Mendelssohn heirs no option but to file suit in New York to reclaim the painting.