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The Litigation Daily is a big admirer of Austrian impressionist painter Egon Schiele, and we’ve enjoyed checking out his intense, angular portraits in New York museums like the Neue Galerie. But one Schiele painting in New York has been off limits to art lovers ever since it was seized by Manhattan’s district attorney in 1997 while on loan from Vienna. The 1912 painting “Portrait of Wally” has remained in U.S. custody, locked in a Queens warehouse, as government lawyers and heirs to a Jewish art dealer battled with Austria’s Leopold Museum over allegations that the work was stolen by the Nazis. Now, thanks to a ruling by Manhattan federal district court judge Loretta Preska, the long-simmering litigation over “Portrait of Wally” may finally be headed for trial — and the painting may be closer to seeing the light of day. Late last month, Judge Preska denied motions for summary judgment by the Leopold Museum and the Justice Department, finding that the question of whether the Leopold knew the portrait was allegedly stolen when it was brought to the U.S. is a triable issue of fact. Here’s the judge’s 110-page opinion. [Hat tip to Courthouse News.] The backstory shares elements with other cases involving allegedly looted Nazi art, though the Schiele case has garnered particular attention in part because of the number of reversals involved. The dispute began when the Leopold loaned the painting to New York’s Museum of Modern Art for a Schiele exhibition in 1997. Heirs of Jewish art dealer Lea Bondi claimed that the Nazis had stolen the work from Bondi, who fled Austria after German annexation, and that the Leopold knew of the theft. Manhattan District Attorney Robert Morgenthau seized the painting, only to have an appellate court order its return to Vienna. Then, in 2002, the federal government won a ruling allowing it to confiscate “Wally” under the National Stolen Property Act. The government and Bondi’s heirs have been fighting for the painting ever since. Manhattan Assistant U.S. Attorney Barbara Ward is leading the government’s case. Bondi’s heirs are represented by Howard Spiegler of Herrick, Feinstein. We reached out to the Leopold Museum’s lead lawyer, William Barron of Smith, Gambrell & Russell, to see how he felt about the prospects of a trial. Barron told us that he was still having the judge’s opinion translated into German for the museum foundation’s board and could not comment.

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