February 5, 2001

JAPANESE MUSEUM RETURNS NAZI LOOT TO RIGHTFUL OWNER

Jen Lissitzky announced, through his New York attorneys, Lawrence M. Kaye and Howard N. Spiegler of Herrick, Feinstein LLP, that the Kiyomizu Sannenzka Museum in Kyoto, Japan has returned to him a watercolor entitled "Deserted Square of an Exotic Town", 1921, by Paul Klee that had been stolen from his mother, Sophie Küppers-Lissitzky, by the Nazis. Masayuki Murata, Director of the Museum, stated that he was delighted to return the work and right a past wrong. Murata also said that he had received a "symbolic payment" of an undisclosed amount in recognition of the museum's courageous decision to return the painting. This is the first time a Japanese museum has recognized the rights of a true owner of a work of art that had been confiscated by the Nazis and consequently misplaced during World War II.
The painting was part of Sophie Küppers- Lissitzky's collection of some 13 works which she loaned to the Provinzial Museum in Hanover in 1926, before she left Germany for Russia to marry the Russian avant-garde artist, El Lissitzky. In 1937, the Nazis seized the Küppers-Lissitzky collection, including the Klee painting, from the museum as part of the Nazi "degenerate art" campaign. The Nazis sold the "degenerate" works abroad for foreign currency and it is in this way that the Küppers-Lissitzky collection was dispersed throughout the world.
Jen Lissitzky, the heir of Sophie Küppers- Lissitzky and rightful owner of the collection, has, with the assistance of the art historian Clemens Toussaint, been attempting to recover his mother's collection for several years and had, until recently, believed the Klee painting was lost. In a historic turn of events, Mr. Murata learned that Jen Lissitzky was looking for the painting and decided to return it to him.
This is the second painting from the Küppers- Lissitzky collection to be returned to Jen Lissitzky. In January 2000, a museum in Cologne, Germany returned a painting by Louis Marcoussis. Other claims remain unresolved. Discussions are ongoing with a municipal museum of the City of Munich to resolve a claim for one of the other Klee paintings from the Küppers- Lissitzky collection. And Lissitzky also seeks the return of a major Kandinsky painting from the collection of the Beyeler Foundation in Basel, Switzerland.
A digital image of the painting, courtesy of Jen Lissitzky, can be requested by e-mail to mkone@herrick.com or mfowl@herrick.com.

Sotheby's Guilty Plea Brings Collusion Case Closer to End

By CAROL VOGEL
With a federal judge's acceptance on Friday of a plea deal in which the auction house Sotheby's admitted its guilt in a price-fixing conspiracy and agreed to pay a $45 million fine, the Justice Department investigation and the civil suits that have stemmed from the case are ending. But even as lawyers begin winding down their work, questions remain, particularly in the criminal investigation, about the collusion between Sotheby's and its competitor, Christie's. The most prominent is whether A. Alfred Taubman, Sotheby's former chairman and the company's controlling shareholder, will face an indictment stemming from the collusion, which involved fixing commission rates paid by many customers through much of the 90's. While Mr. Taubman has denied any wrong doing, the Justice Department is said to have been meetings with his lawyers for several weeks. Another meeting is believed to be scheduled for tomorrow. Also at issue in the criminal inquiry is when the collusion began. On Friday, in spelling out the terms of a $512-million civil settlement agreed to by the two auction houses, David Boies, a lawyer for the 130,000 customers represented in the class-action suit, said he believed that collusion had begun either in early 1992 when Sotheby's and Christie's decided to raise the fees they charged buyers or that, at the very least, the companies colluded to maintain their charges in the years that followed. But Sotheby's lawyer Steven A. Reiss of Weil, Gotshal & Manges said Sotheby's has maintained that there was no collusion over buyer's fees, but only over seller's fees beginning in 1995. Mr. Reiss called the amount that Sotheby's has agreed to pay "extraordinary," adding that the auction house's half of the settlement exceeds the $22 million he estimates were the damages to its customers. Mr. Taubman has agreed to pay $156 million of Sotheby's $256 million share of the settlement. Rather than paying their settlement entirely in cash, Sotheby's and Christie's initially offered to pay $100 million in certificates that future sellers could use toward commission fees and other charges. This has triggered a dispute over the value of the coupons. Judge Lewis A. Kaplan of the Federal District Court in Manhattan, initially skeptical of the value of the coupons, commissioned an analysis that determined the value of the certificates should be increased to $118 million. Last month, under pressure from Mr. Boies's firm, Boies, Schiller & Flexner, the auction houses agreed to increase the value to $125 million. Some auction-house customers said the certificates were a benefit for sellers because their cash value was 80 cents to the dollar. "I'll be happy to buy them from anyone who wants to sell them," said Michael R. Zomber, a fire arms and armor dealer from Culver City, Calif. But Thomas R. Broussard, speaking on behalf of some auction house customers at Friday's hearing, called the certificates nothing but a "marketing tool" that would "continue the duopoly." "Phillips is trying to get into this market," Mr. Broussard said, referring to a third auction house that is challenging Sotheby's and Christie's, but which would have no reason to honor the coupons. "How are they going to compete," he said, "if we don't just get cash?" Objections were also raised to Judge Kaplan's decision to dismiss three lawsuits brought against the two houses by buyers at foreign auctions. Judge Kaplan said the claims had no merit. For all the arguing, there were no complaints from customers about the amount of the settlement. As Friday's hearing was nearing its end, the judge spoke about his unusual decision to hold an auction in which law firms hoping to be named lead counsel submitted bids that were weighed in terms of which would likely return the most money to the plaintiffs. The average bid envisioned a settlement of $130 million, the judge said, hundreds of millions less than the final figure the judge is considering. The bid by Mr. Boies and his partner Richard Drubel was so advantageous, the judge said there was a savings in legal fees of tens of millions of dollars, which he called "successful beyond my imaginings."
http://www.nytimes.com/

February 5, 2001

CONTENTS:

FOR IMMEDIATE RELEASE

JAPANESE MUSEUM RETURNS NAZI LOOT TO RIGHTFUL OWNER

Sotheby's Guilty Plea Brings Collusion Case Closer to End