NEW YORK, NY.- On January 31, 2009, the Solomon R. Guggenheim Foundation settled litigation concerning its ownership of Pablo Picasso’s Le Moulin de la Galette. Given the extensive costs associated with prolonged litigation, the Guggenheim determined that agreeing to settle the case was the best and most fiscally prudent course of action to ensure that the painting would remain on view for the benefit of the public and scholars.

At issue in this litigation was whether the sale of Le Moulin de la Galette to Justin K. Thannhauser (1892–1976) in 1934 or 1935 in Nazi Germany was the product of economic duress. Extensive research into the provenance of the painting, the key findings of which are set forth below, is the basis for the Guggenheim’s conclusion that it is, and has always been, the rightful owner of the painting, and that the sale of the painting by the von Mendelssohn-Bartholdys was not due to economic duress.

Background, Gift of Paintings to Elsa von Mendelssohn-Bartholdy, and Acquisition of Paintings by Justin K. Thannhauser
Paul von Mendelssohn-Bartholdy (1875–1935) was a descendant of the philosopher Moses Mendelssohn and the composer Felix Mendelssohn. At the time of his death in May 1935, Paul was one of two senior partners in the Mendelssohn & Co. bank, one of the largest and most important privately owned banks in Germany. Mendelssohn & Co. was run by Jewish members of the family until 1938.

In February 1910, Paul executed his first will and testament, which provided that his then wife, Charlotte (née Reichenheim, later Countess Wesdehlen, 1877–1946), would inherit all household property acquired during their marriage, such as furniture and artworks.

In or around 1910, Paul purchased Pablo Picasso’s Le Moulin de la Galette (1900) from the Moderne Galerie in Munich. Heinrich Thannhauser, the owner of the gallery, was the father of art dealer, collector, and subsequent owner of the painting Justin K. Thannhauser.

Paul and Charlotte divorced and, in September 1927 Paul married Elsa (née von Lavergne-Peguilhen, later Countess von Kesselstatt, 1899–1986). Elsa was Christian.

In July 1934, Thannhauser’s cousin, Siegfried Rosengart (1894–1985) of the Galleries Thannhauser in Berlin and Lucerne, recorded in his collector notebook a visit and series of discussions with Paul. Rosengart’s remarks alongside a list of five Picasso pictures indicate that the collector “eventually might part with these for a good offer.” The five Picasso pictures included Le Moulin de la Galette. In October 1934, the Galleries Thannhauser organized a loan of the five Picasso paintings to an exhibition of the artist’s work at the Galeria Müller in Buenos Aires.

In February 1935, Paul executed a contract of inheritance that excluded from his estate any marital property, including, specifically, the von Mendelssohn-Bartholdy art collection, which Paul confirmed he had previously given to Elsa upon their marriage in 1927. Thus, the contract of inheritance reiterated the concept set forth in Paul’s 1910 will that all marital property, including artworks, was to be owned solely by his wife. At the time of Paul and Elsa’s marriage, the art collection included over fifty pictures by such artists as Vincent van Gogh, Henri Rousseau, and Picasso. Among these works were such masterpieces as van Gogh’s Sunflowers (1889) and Picasso’s Boy with a Pipe (1905).

Paul died of heart failure on May 10, 1935. Immediately following his funeral and burial, his widow Elsa, his four sisters, and three of their husbands (including one of the claimants’ grandparents) all signed a legal protocol affirming the validity of the February contract of inheritance and the 1927 gift of art and other matrimonial property to Elsa. None of Paul’s four sisters (including one of the claimants’ grandmothers, who died in 1970 and who remained in touch with Elsa after the war), ever claimed that Elsa was not the rightful owner of the collection or that the contract of inheritance had simply been a device to avoid potential Nazi confiscation.

The five Picassos were recorded in the stock book of the Galleries Thannhauser on August 31, 1935, with the indication that they were already in the possession of the gallery’s Berlin branch. Thus, the Galleries Thannhauser acquired the five pictures as a group sometime between July 1934 and August 1935. The purchase prices paid by Thannhauser for each of the five Picassos, including Le Moulin de la Galette, are not known.

Paul’s widow, Elsa, who lived until 1986, never made a post-war compensation or restitution claim for any of the five Picassos sold to Thannhauser, nor did any of Paul’s sisters or their children.

Neither the German state nor the Nazi Party confiscated or seized the paintings, nor did they receive any of the proceeds from the sale of the paintings. Neither Paul nor Elsa was restricted in any way from freely moving or disposing of the paintings.

Paul and Elsa von Mendelssohn-Bartholdy’s Finances and Property
The February 1935 contract of inheritance stated, for purposes of computing the notary’s fee, that Paul had a net worth at the time of RM 1,700,000 (or $10,261,329, adjusted to current U.S. dollars based on the consumer price index), excluding the value of the art collection and other marital property previously given to Elsa. At the time of Paul’s death in May 1935, the estate was valued for tax purposes at RM 847,201 (or $5,141,646 converted to current U.S. dollars), also excluding the value of the art collection and other marital property. The two valuations were for different purposes and, as such, are not inconsistent. Therefore, Paul's approximate net worth in 1935, exclusive of the art collection and other marital property, was between $5 and $10 million in current dollars. Furthermore, the value of the more than forty artworks and ninety engravings remaining in the von Mendelssohn-Bartholdy collection when it was appraised at some point between 1935 and 1945 was approximately RM 400,000 (or approximately $2.5 million in current U.S. dollars). Thus, the value of Le Moulin de la Galette represented a negligible percentage of the total value of the von Mendelssohn-Bartholdys’ net worth at the time the painting was sold.

At the time of Paul’s death, Paul and Elsa owned three properties in Germany: the family estate, Schloss Boernicke in Bernau near Berlin; a city mansion on Alsenstrasse in central Berlin; and a farmhouse in rural Bavaria, which Paul had purchased in autumn 1934. They also leased a fourth property, the garden residence on the property of Berlin’s Bellevue Palace (today the residence of the German President).

Mendelssohn & Co. suffered substantial losses in 1929 and 1930, likely as a result of the Great Depression. However, Mendelssohn & Co. earned a profit in 1934 and an increased profit in 1935.

Elsa’s Life after the War
Elsa remained a shareholder in Mendelssohn & Co. until around 1941. In 1941, she married Imperial Count Max von Kesselstatt, who was from a German aristocratic family and was a Luftwaffe pilot during the war. Elsa and her second husband continued to live on the von Mendelssohn-Bartholdy family estate, Schloss Boernicke, until spring 1945 when the Russian army entered Germany.

Over the twenty-year period following the war, Elsa sold artworks from the von Mendelssohn-Bartholdy collection with the assistance of art dealers who had been well known to her and her late husband Paul. Elsa died in Ascona, Switzerland, in 1986. She survived all four of Paul’s sisters.

Elsa made a vigorous but unsuccessful post-war claim for the loss of Schloss Boernicke, which was overtaken by the Russian army in 1945 but, as noted above, never made any claim for any of the five paintings by Picasso.

Thannhauser and the Galleries Thannhauser
In 1919, Thannhauser opened a branch of his father’s Munich gallery, the Moderne Galerie, in Lucerne, Switzerland, with Siegfried Rosengart. Thannhauser opened a third branch of the gallery in Berlin in 1927.

As a result of persecution by the Nazis, Thannhauser and his family, who were Jewish, emigrated from Berlin to Paris in April 1937, where he operated a private gallery. In order to leave Germany, Thannhauser was compelled to liquidate his gallery's considerable inventory of classic German and modern art and to pay the reichfluchtsteur (exit tax). In December 1937, Thannhauser’s Berlin gallery formally registered for closure due to pressures from the Nazi regime.

After the fall of France and the occupation of Paris by the Germans, the Thannhausers’ Parisian residence/gallery was plundered by the Einsatzstab Reichsleiter Rosenberg (ERR) and Möbel-Aktion, two Nazi looting agencies. The majority of the antique furniture, books, and art and much of the gallery’s archives taken at that time have never been recovered.

Thannhauser and his family immigrated to the United States in December 1940. He retained ownership of three former von Mendelssohn-Bartholdy collection Picassos, including Le Moulin de la Galette. Thannhauser exhibited these Picassos at MoMA and elsewhere from the late 1930s onward. Paul’s relatives continued to do business with Thannhauser and occasionally visited his New York gallery and residence, where the Picassos were on prominent display.

In 1963, Thannhauser announced his intention to bequeath the essential works in his art collection to the Guggenheim Museum. From 1965 until Thannhauser’s death in 1976, the works, including Le Moulin de la Galette, were placed on loan to the Guggenheim and continually exhibited in the museum’s newly-dedicated Thannhauser Wing. Le Moulin de la Galette was accessioned into the collection of the Guggenheim Museum in 1978, after Thannhauser met multiple times with Guggenheim Trustee Daniel Catton Rich to answer questions from Guggenheim researchers about the history and provenance of the works he was donating, including Le Moulin de la Galette.

From 1935 to the present, Le Moulin de la Galette has been included in twenty-five exhibitions around the world and has remained on permanent view, when not on loan, in the Thannhauser wing at the Guggenheim. Numerous publications and exhibition catalogues have listed Thannhauser and the Guggenheim as owners of Le Moulin de la Galette and often also mention Paul as a prior owner.

Thannhauser’s Restitution Efforts on Behalf of Others After World War II
After the war, Thannhauser was instrumental in reuniting art with collectors who had entrusted him with the care of their artworks during the war. In May 1939, Thannhauser arranged for the loan of several pictures from various European private collectors to a traveling exhibition of Impressionist and modern masterworks in South America and the United States. Because of war conditions, the pictures did not return to France after the exhibition closed but remained in storage at the National Gallery of Art, Washington, D.C., until 1945/46. Thannhauser personally ensured the safe return of these paintings to their rightful owners in Europe after the war.

In August 2005, a restitution case involving Picasso’s Femme en blanc (1922) was settled out of court. This Picasso had been sent to Thannhauser in Paris by Carlotta Landsberg when she fled Berlin for South America in 1938 or 1939. The picture was looted from Thannhauser’s gallery in Paris by the Nazis during the ERR raids. Thannhauser informed the restitution authorities that the picture did not belong to him, but rather to Landsberg. When the painting resurfaced in 2001, Thannhauser’s post-war restitution files helped to identify Landsberg as the rightful owner of the painting.

Terms in Le Moulin de La Galette Settlement to Remain Confidential

Statement from the Museum of Modern Art and the Solomon R. Guggenheim Foundation Regarding the Confidentiality of the Terms of the Settlement of Claims to Picasso Paintings

On March 23, 2009, Federal Judge Jed S. Rakoff determined that the terms of the settlement of litigation concerning ownership of two works by Pablo Picasso, Boy Leading a Horse (1906) in MoMA’s collection and Le Moulin de la Galette (1900) in the Guggenheim’s collection, would remain confidential. While the museums consented to the terms of the settlement being made public, the claimants did not, and as a result, the court was required to maintain confidentiality.

MoMA’s Director Glenn D. Lowry and Director of the Solomon R. Guggenheim Foundation and Museum, Richard Armstrong, said: “The museums take restitution issues extremely seriously. Our provenance research made clear from the beginning that the museums are the proper owners of these works, and that the claims had no merit. It was a prudent decision—we settled simply to avoid the costs of prolonged litigation, and to ensure the public continues to have access to these important paintings.”

Boy Leading a Horse (1906) is currently on view at MoMA and Le Moulin de la Galette (1900) is currently on view at the Guggenheim Museum.