June 14, 2012 / 8:40 PM / 5 years ago

Vienna museum settles in looted painting case

3 Min Read

VIENNA (Reuters) - A painting by Egon Schiele which was seized by the Nazis on the eve of World War Two was shown in public for the first time in over a decade on Thursday after a Vienna museum reached a "hard-fought" settlement with its remaining claimants.

Last year, the Leopold Museum said it had agreed to pay $5 million in compensation to the sole granddaughter of Jenny Steiner, who owned the Schiele painting "Houses by the Sea" when Nazi Germany occupied Austria in 1938, but that negotiations with two other sets of heirs continued.

"Following the settlement with the only living granddaughter of Jenny Steiner in May 2011, strenuous efforts have now led to another settlement with the heirs of Daisy Hellmann and Klara Mertens," the museum said in a statement.

The statement did not give financial details.

The dispute is the second of two restitution cases the Leopold Museum has now settled with the help of funds raised by selling another Schiele painting, "Houses with Colourful Laundry, Suburb II", which fetched a record 24.7 million pounds ($38.5 million) at an auction in 2011.

The museum houses the world's largest collection of works by Schiele, one of Austria's major 20th century artists.

Spokesman Klaus Pokorny said "Houses by the Sea" had not been displayed in public since the late 1990s, when the legal wrangling began.

"The foundation preferred not to show it because they waited for a solution to this case. It was always in a depot of the museum. Today it was shown for the first time officially to the public. It is a great day for us," Pokorny said.

"It is one of his most fascinating paintings," he added.

Steiner, a Jewish silk factory owner and art collector, fled in 1938 when Nazi Germany annexed Austria and died in New York in 1958. Collector Josefine Ernst bought the painting at an auction in 1941. Her son sold it to Rudolf Leopold in 1955 to complement his collection of works by Schiele, the museum said.

Proceeds from the Leopold's sale of the cityscape "Houses with Colourful Laundry" at a Sotheby's auction in June last year were to be used to help pay for the settlement of another long-running dispute over a 1912 painting of Schiele's lover Walburga Neuzil.

A Manhattan court upheld claims that work had been confiscated by the Nazis, prompting the museum to pay $19 million in a settlement to keep it.

Reporting by Fredrik Dahl; Editing by Andrew Heavens

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