We continue to follow the ongoing conversation in the art world about how best to handle disputes over artwork that was looted or displaced during the chaos and persecution of World War II.  Sometimes, these disputes involve contentious litigation where a current possessor fights to keep an artwork in the face of claims by heirs of those victimized by the Nazi regime; in other cases, parties reach negotiated settlements where a work can be voluntarily restituted to its rightful owners.  And, as one recent story demonstrates, sometimes a current possessor takes another path, demonstrating willingness to return a work to rightful claimants but looking to a third party for compensation for the loss.
 
We’re watching this dynamic unfold in an international dispute over an Alfred Sisley painting.   Back in 2008, at a Christie’s auction in New York, Swiss art dealer Alain Dreyfus was the winning bidder for a small Sisley landscape, First Day of Spring in Moret.  Years later, however, he learned that the work had a checkered past; Mondex, a company that specializes in recovering looted assets, presented him with information showing that the painting had once been in the collection of Alfred Lindon, a Jewish jeweler who fled Paris when the Nazis invaded the city.  Historical documents suggest that Lindon placed his art collection in a bank for safekeeping, but the works were later confiscated by the Nazi regime; indeed, one document indicates that the Sisley was at one point held by Hermann Goering, a top Nazi official who amassed a vast collection of ill-gotten art during the war. 
 
A Lindon heir has reportedly instituted legal proceedings in France to recover the work, and by all accounts, Dreyfus is prepared to hand it over to the family.  He argues, however, that the financial hit should be borne not by him but by Christie’s, and is asking the auction house to reimburse him the $338,500 he paid for the painting (plus interest).  He says that Christie’s should have uncovered the work’s tainted provenance and should never have sold the painting.
 
Christie’s, for its part, says that its due diligence on the work in 2008 turned up no reason to suspect that the work was looted.  But Dreyfus and Mondex say that there were resources available in 2008 that would have shown, for example, that several Sisley paintings, including three “Spring” scenes, were stolen, and that the Lindon family had lost a painting with the same dimensions, signature and date as the one up for sale.  At least one legal expert has opined that he too would have seen no “red flags” in the 2008 Christie’s provenance.  Dreyfus counters that the Christie’s-provided provenance was vague as to the work’s history between 1923 and 1972, during which period Christie’s only noted that it was in the hands of prominent Paris dealership Wildenstein et Cie, whose dealings during the war have been the topic of some dispute.
 
At the core of this situation is a fundamental question—a question lies at the heart of many of the cases we write about and one to which there is often no simple answer: How much diligence is enough?  It’s clear that Christie’s did a fair amount of diligence prior to the auction, consulting multiple databases in an effort to ensure there were no clouds in the work’s history.  But Mondex says that Christie’s failed to consult certain other sources, and failed to connect certain dots in the historical record.  Christie’s has pointed out that one of the databases used by Mondex was not digitized until about two years after the auction.  A major auction house like Christie’s clearly has sufficient resources, expertise and manpower at its disposal for provenance research; but at what point can it put an object on the auction block with confidence, and at what point does it have an obligation to keep digging?  And what is the obligation of a buyer at auction—particularly where, as here, the buyer is himself an art-savvy professional dealer—to do independent diligence versus simply accepting the seller’s vetting of a piece?  And when, despite diligence efforts, a true owner comes forward to reclaim a work, who should bear the loss?  We’ll continue to follow this story and others like it, as the art world continues to grapple with the difficult legacy of the Nazi era.