Burris & Schoenberg, LLP

Austria May Pay Record Price for Klimt Portrait Seized by Nazis

(The opinions expressed do not necessarily reflect those of Bloomberg.)

By Matthias Wabl

Jan. 27 (Bloomberg) -- Austria may make art-market history, paying the
highest price ever for a painting, to ensure a Gustav Klimt portrait stays
in the national gallery after a court ordered the government to return the
work to its original owners.

The portrait, ``Adele Bloch-Bauer I,'' seized by the Nazis almost 70 years
ago, may top the $104 million paid for Picasso's ``Garcon a la Pipe'' in
2004, said Vienna art dealers including Eberhard Kohlbacher. The highest
price paid for a Klimt painting was $29.1 million for ``Landhaus am
Attersee'' in 2003.

``If we let that portrait go, we might just as well tear down St. Stephan's
Cathedral,'' said Kohlbacher, who specializes in Austrian painters such as
Klimt and Oskar Kokoschka. ``It doesn't matter whether the government
overpays by 20 million or so, as this embodies the history and the spirit of
one of the most important eras of the country.''

Klimt painted the portrait of Adele Bloch-Bauer in 1907. At the beginning of
the 20th century, the Jewish Bloch-Bauer family hosted salons that attracted
artists including composer Gustav Mahler and writer Arthur Schnitzler. The
painting was seized by the Nazis in 1938 and later given to the
Oesterreichische Galerie in the Belvedere castle.

The oil-and-gold painting depicts a bejeweled, pale-skinned, dark-eyed and
ruby-lipped Bloch-Bauer in a richly patterned evening dress and gown against
a thickly textured gold background.

It's one of five paintings that a Viennese arbitration panel last week ruled
must be restored to Maria Altmann of California, a descendant of the
Bloch-Bauer family. The family fled Vienna after the Nazis took power in
Austria in 1938.

Picasso Record

The Altmann family has asked international auction house Sotheby's to value
the paintings. Sotheby's Austrian director Andrea Jungmann declined to
comment on the value, though she said Picasso's ``Garcon a la Pipe,'' was
``the last picture of similar quality on the market.''

``Museums, collectors and art dealers are interested in buying this
painting,'' she said.

Austrian Culture Minister Elisabeth Gehrer said she will seek a way to keep
at least some of the paintings in Austria. She conceded that her ministry
doesn't have enough money to buy them.

In addition to the portrait known as ``Golden Adele,'' Austria must return
``Adele Bloch-Bauer II,'' ``Apfelbaum I,'' ``Buchenwald/Birkenwald'' and
``Haeuser in Unterach am Attersee.''

Heirs' Options

Austria and Altmann submitted the dispute to arbitration in May 2005 and
said they would abide by the court's decision. The U.S. Supreme Court ruled
in June 2004 that Altmann could sue Austria for return of the works.
Altmann, who will turn 90 in February, opened a boutique in Los Angeles
after fleeing Vienna and has been trying to get the paintings back since
1998, when Austria passed a law for art restitution.

``It would be nice if the paintings stayed on public view as they are
well-known,'' Randol Schoenberg, a lawyer for Maria Altmann, said in an
interview. ``The heirs have all the options. They can keep them, they can
sell them to museums or they can sell them to private art collectors.''

Vienna art dealer Wolfdietrich Hassfurther says he isn't sure whether the
government will end up paying a record price for the painting.

``One shouldn't exaggerate with the price,'' he said, ``Klimt hasn't become
more popular in recent years, and a van Gogh or a Picasso certainly aren't
less valuable than a Klimt.''

``You have to be careful,'' Hassfurther said. ``You can't automatically say
that this painting is going to yield at least amount X.'' The only ``real
price'' can be determined when a painting is actually sold, he said.

`Museum Price'

Culture Minister Gehrer has argued that the portrait could be purchased at a
lower ``museum price'' of between $36.7 million and $49 million. Museums
sometimes pay lower prices than private collectors because the owners
consider it an honor to have their work displayed in a particular museum.

``Mrs. Altmann doesn't have any reason to make concessions to Austria
because the country hasn't been that nice to her,'' Viennese art dealer Otto
Hans Ressler said. ``Austria's attitude hasn't been fair or generous in the
past 60 years.''

Schoenberg, Altmann's lawyer, expects that it will be clear by April whether
the Austrian government will buy the paintings.

The Austrian public is against the purchase, according to an opinion poll of
the OGM institute on Jan. 23 with 500 respondents. A majority of 66 percent
of people polled are against it while 26 percent say the government should
buy the paintings.

``The pressure to keep the paintings is coming from an influential minority
because the majority of Austrians doesn't really care about art or
museums,'' said Ressler. ``I wouldn't have a problem if Adele was on display
at the Metropolitan Museum of Art, or the MoMA in New York. It would be a
good ambassador for Austria abroad.''

To contact the reporter on this story:
Matthias Wabl in Vienna at mwabl@bloomberg.net

2006-01-27

Austria Makes Reparations for Nazi Past

by Tom Tugend, Contributing Editor

Maria Altmann points to a copy of a famous Gustav Klimt portrait of her aunt
Adele Bloch-Bauer. Photo by Tom Tugend

The expulsion and extermination of 182,000 Austrian Jews during the Nazi era
is a wound that will never heal completely, but two important decisions
during recent weeks at least point to a symbolic closure for the dwindling
number of survivors and the Austrian government.

In a high-profile case, Maria Altmann won her seven-year battle to recover
from Austria five famous paintings looted by the Nazis and now valued at
$200 million. The art works were seized in Vienna in 1938 from Ferdinand
Bloch-Bauer, a wealthy Jewish sugar magnate and Altmann�s uncle.

After an even longer period of legal and diplomatic wrangling, a court
decision has cleared the final hurdle for payment of restitution money to
survivors or the heirs of victims.

The drawn-out Altmann case finally reached its end when the Austrian
government accepted the decision of an arbitration court in Vienna that the
five paintings by Gustav Klimt rightfully belonged to Altmann and four
relatives.

The decisive ruling in favor of Altmann and her attorney, E. Randol
Schoenberg, is �the most important victory in the entire history of
litigation on Holocaust restitution,� said professor Michael J. Bazyler of
Whittier Law School, whose latest book, �Holocaust Restitution: Perspectives
on the Litigation and Its Legacy,� has just been published by New York
University Press.

Altmann, a tall and animated Cheviot Hills resident, who will celebrate her
90th birthday next month, greeted the decision as �Fabulous.... It is
wonderful that justice has finally been done, that was my whole goal.�

Born Maria Victoria in Vienna in 1916, she was raised the pampered daughter
of the fabulously wealthy Bloch-Bauer family. Her uncle Ferdinand owned
Austria�s largest sugar-refining factory, numerous mansions and a major art
collection.

The Bloch-Bauers were Jewish, but in the selective manner typical of central
Europe�s Jewish upper class.

�We went to a temple once a year on Yom Kippur, where I remember seeing the
Rothschilds, the men in top hats and cutaway coats,� Altmann recalled. �But
otherwise, we celebrated Christmas and Easter. That�s sometimes hard to
explain to American Jews.�

In December 1937, in the last grand Jewish wedding in Vienna, Maria
Block-Bauer married Fritz Altmann, an aspiring opera singer. The newlyweds
left for an extended honeymoon. Shortly after their return, Hitler�s troops
marched into Vienna, amid the unrestrained jubilation of the Austrian
people, Maria Altmann remembers well. In one of their first acts, the Nazis
seized the art collection of Ferdinand Bloch-Bauer, including the Klimt
paintings.

The most famous of the paintings is a gold-flecked portrait of Altmann�s
aunt, Adele Bloch-Bauer, currently a centerpiece of the Austrian National
Gallery and one of the most reproduced pictures of all time.

Following the ruling, there remain some loose ends to be tied up, especially
whether Austria will try to buy the Adele portrait, considered a national
treasure, from Altmann.

The portrait itself is valued at about $100 million, and the government has
said it cannot afford the sum, which is equal to the annual budget for all
Austrian museums.

It is Austria�s hope that a generous private donor might step up and pick up
the tab.

The other Klimt works are a second portrait of Bloch-Bauer and three
landscapes.

Schoenberg predicts that his client�s victory will encourage other
governments and museums, especially in France and Spain, to arrive at
settlements on other cases of Nazi looted art taken from Jews during the
Hitler era.

A bizarre touch was added last week, when Schoenberg received an anonymous
e-mail, whose sender threatened to destroy the Klimt paintings in order for
�hungry people to get bread.� Austrian authorities temporarily removed the
paintings from the National Gallery, and then arrested a 50-year-old man,
tracked down through his Internet provider.

The unidentified man claimed that he was drunk when he sent the e-mail.

Until two years ago, Altmann, mother of four and grandmother of six,
supported herself by running a fashionable dress shop for women over 40.

Her fortunes have changed in recent months. In addition to the money she is
expected to receive under the settlement with Austria or the sale of some of
the Klimt paintings, Altman and 13 co-heirs got $21.8 million last year in
recompense for the sugar factory and other properties seized by the Nazis.

Although the Bloch-Bauers had the foresight to set up a trust account for
the factory�s stock in a Swiss bank to shield it from seizure, the bank
turned around and sold everything to a well-connected German businessman at
a fraction of its value.

Altmann said she plans no changes in her lifestyle.

�I�ll stay in the same home where I�ve lived for 30 years and keep driving
my �92 Ford,� she said. �And I don�t need any new clothing.�

However, she plans �to do something� for the Jewish communities in Austria
and the United States and for Israel.

Once the money is in hand, she also hopes to realize her long-held dream of
sponsoring a performance by the Los Angeles Opera, starring her idol, tenor
Placido Domingo. The event would be dedicated to her late husband, whose
operatic career was cut short when he had to flee Austria.

Altmann said she had urged Austria seven years ago to arbitrate the dispute,
�but I never got a response back.�

Schoenberg savored the end of the lengthy confrontation, noting that �at the
beginning, we didn�t think we had any chance at all.�

A decisive break in the legal proceedings came in June 2004, when the U.S.
Supreme Court ruled that Austria could be sued in a U.S. court, despite the
opposition of the Austrian and American governments.

The Supreme Court decision helped Austria �to finally see the light� and
agree to arbitration, Schoenberg said.

Austria Accepts Responsibility

While the Altmann case has made headlines, it is only part of the larger
question of Austria�s responsibility toward Nazi victims in the postwar
decades. Austria, whose native son Adolf Hitler incorporated it into the
Third Reich during the 1938 Anschluss, played the role of �first victim� of
the Nazis, guiltless of the Holocaust and other atrocities.

This attitude changed in the mid-1990s, when the Austrian president admitted
for the first time that his country bore its share of blame for Nazi crimes
against Jews, as well as against the Roma and Sinti (gypsies), homosexuals
and the disabled.

In 1995, the Austrian parliament established the National Fund for Victims
of National Socialism, which over the past 10 years has appropriated some
$770 million under various programs compensating for loss of property,
education, pensions, tenancy rights, and for slave labor and hardship cases.

But Austria has held back a good chunk of the allotted money, some $210
million, until the government was guaranteed that no subsequent class-action
suits against Austrian businesses would be filed by survivors.

Last month, a U.S. District court in New York dismissed all such
class-action suits, a decision welcomed by the Claims Conference, which
negotiated with Austria on behalf of survivors.

The first payments to some 19,000 claimants in 69 countries are to start
next December and should be completed one year later, said Hannah M.
Lessing, secretary general of the Austrian National Fund. Lessing was in Los
Angeles last week to meet with survivors and, accompanied by Austrian Consul
General Martin Weiss, met with The Journal over cappuccino at a Brentwood
restaurant.

Lessing was born in Vienna in 1963, the daughter of a Jewish photographer
who had fled from Vienna to Palestine in 1939, but returned to his native
city after the war. He had left behind his mother and grandmother, who both
perished in Auschwitz.

Lessing�s non-Jewish mother, with Hannah and her siblings, formally
converted to Judaism in 1973. Her later resum� includes a stay in Israel,
where she worked as a hotel receptionist and businesswoman.

The raven-haired Lessing wore a prominent Star of David around her neck,
which led to a question about the widely reported wave of anti-Semitism
again rising in Europe.

She said that the reports were greatly exaggerated, although remnants of
classical anti-Semitism remain and in France, especially, threats from young
Muslim immigrants.

�I wear my Star of David in Vienna without any comments or incidents,�
Lessing said. �But when I�m in Paris, my friends think I�m crazy to do so,
and in New York I am often advised that I might be better off leaving it at
home.�

On a subtler level, she acknowledged that most non-Jewish Austrians would
categorize her first as a Jew and secondly as an Austrian, just as in past
decades most non-Jewish Americans considered Jewish citizens as not �real
Americans.�

Her answer drew a pained rebuttal from Consul General Weiss.

�I am a Catholic, and I consider Hannah as much an Austrian as I am,� he
protested.

When Lessing switched from her career as a banker five years ago to accept
her present position, she insisted on a pro-active policy of seeking out
survivors, open access by claimants to her offices and a minimum of red
tape. Nevertheless, she acknowledged criticism that the whole process is
still too slow and complex, especially given the advanced age of the
remaining survivors.

�There are only some 12,500 Austrian survivors still alive, and every time
one dies, we lose,� she said.

Lessing also wishes that she could raise the payment rate for Jewish
property lost during the Nazi era, which now stands at only 10 to 15 percent
of current valuation.

�No amount of money can ever make up for the suffering of the Holocaust,�
she said. �Whatever we do is meant as a gesture of reconciliation toward our
former citizens.�

Klimt-Bilder: Experten im Belvedere
Experten der �sterreich-Dependance des Auktionshauses Christie�s haben am Freitag, den 17. Dezember 2006 die Klimt-Bilder in der �sterreichischen Galerie Belvedere begutachtet.
Das best�tigte Direktor Gerbert Frodl gegen�ber der APA. Bereits vergangene Woche hatten Vertreter von Sotheby�s im Auftrag von Randol Schoenberg, dem Anwalt der Bloch-Bauer-Erbin Maria Altmann, die Klimt-Bilder begutachtet. Die �sterreich-Chefin von Sotheby�s, Andrea Jungmann, war von Schoenberg gebeten worden, ein Angebot zu den Bildern zu stellen.

Zum weiteren Prozedere �u�ert sich Schoenberg in einem Interview mit der �Presse� von heute. Demnach hat �sterreich sieben Tage Zeit, ein Angebot zu stellen. Kommt es zu keiner Einigung, kann innerhalb weiterer drei Wochen mit Hilfe des Mediators Dieter A. Binder verhandelt werden. F�hrt auch das zu keinem Ergebnis, kann jede Seite einen Gutachter nominieren. Wenn auch die Gutachter sich nicht �ber einen Preis einig werden, werde ein dritter Gutachter ernannt. Die Entscheidung muss bis 8. April gefallen sein, die gesamte Prozedur m�sse bis 8. Mai beendet sein.

Die Preise, mit denen Schoenberg bisher in den Medien zitiert wird - 105 Mio. Dollar /85,6 Mio. Euro) f�r �Adele Bloch-Bauer I� und 270 Mio. Dollar f�r alle f�nf Bilder - sind laut Schoenberg Durchschnittswerte verschiedener Sch�tzungen. Zuletzt hatte die Finanzprokuratur Schoenbergs Darstellung widersprochen, wonach �sterreich das erste Angebot f�r den R�ckkauf stellen muss.

Klimt-Bilder: �sterreich bittet Erben um Preisvorschl�ge
�bersicht
Die Republik �sterreich wird sich mit einem Brief an die Erben der Klimt-Bilder wenden und um konkrete Preisvorschl�ge f�r die f�nf Werke bitten. Eine Antwort erwartet man, wie im Schiedsverfahren vereinbart, innerhalb einer Woche.

Das k�ndigte Bildungsministerin Elisabeth Gehrer (�VP) heute vor dem Ministerrat an. Nach der Preisfestlegung sollen dann Gespr�che mit den Sponsoren beginnen. Ob alle f�nf Bilder gekauft werden, lie� Gehrer offen.

Steuerliche Abschreibung f�r Sponsoren

Die �sterreichischen Vermittler seien aus den USA zur�ckgekommen und der n�chste Schritt sei jetzt, einen Brief an die Erben zu schreiben, erkl�rte die Ministerin. Diese sollen dann konkrete Preisvorschl�ge f�r die einzelnen Bilder machen. Danach sollen Gespr�che mit Sponsoren beginnen, erkl�rte Gehrer.

Von Seiten des Staates wird es Abschreibungsm�glichkeiten f�r diese Sponsoren geben, best�tigte die Ministerin.

"'Goldene Adele' wichtigstes Bild"

Ob auch mit Sponsorengeldern alle f�nf Werke gekauft werden k�nnen, lie� Gehrer offen. Entscheidend sei, was f�r die einzelnen Bilder verlangt wird. Als Priorit�t nannte Gehrer die "Goldene Adele" und: "Experten sagen, dass die 'Goldene Adele' das wichtigste Bild ist."

"Verz�gern statt kaufen"

Nach Ansicht des Anwalts der Bloch-Bauer-Erbin Maria Altmann, Randol Schoenberg, hat �sterreich "keine Intention, eines der Bilder zu kaufen, sondern verwendet die Optionsvereinbarung, um die R�ckgabe der Bilder an Frau Altmann zu verz�gern, die in einem Monat 90 Jahre alt wird".

�berdies sei mit der Republik vereinbart, dass diese und nicht die Erben das erste Angebot stellen m�ssen, so Schoenberg. Dazu sei noch sieben Tage Zeit. Das wiederum wies die Finanzprokuratur zur�ck.

"Kein Beweis f�r Kaufabsicht"

"Wir haben ersucht, dass �sterreich das erste Kaufangebot macht, so wie es die Vereinbarung vorsieht." "Bis jetzt haben wir keinen Beweis daf�r gesehen, dass es einen ernsthaften Wunsch oder die F�higkeit von Seiten �sterreichs gibt, die Bilder zu kaufen", so Schoenberg.

Im Magazin "News" meinte Schoenberg, 85 Millionen Euro sehe er f�r die "Adele" als realistisch an.

Mehr dazu in oesterreich.ORF.at
�bersicht