MONTREAL — A Rhode Island federal court will decide whether a painting claimed by the estate of the late German-born Montreal art dealer Max Stern returns to this city.

The First U.S. Circuit Court of Appeals on Oct. 8 heard the appeal of Maria-Louise Bissonnette, an 84-year-old German baroness living in Providence, to overturn the decision that awarded the painting to the Stern estate. Last December, U.S. District Court Judge Mary Lisi ruled that the estate was the rightful owner, and ordered Bissonnette to hand over the painting to the estate.

The estate successfully argued that the 19th-century painting by Franz Xavier Winterhalter had effectively been looted by the Nazi government in 1937, when Stern, then a Dusseldorf art gallery owner, was ordered to liquidate his remaining holdings at a state-sanctioned auction because Jews were banned from the art trade under the Nuremberg Laws.

The estate’s lawyer, Thomas Kline, told the court that Stern gallery inventory was sold for well below its market value and that Stern, who fled to France a month after the 1937 auction, lost most of the proceeds because it was taxed away by Nazi officials when when he and his mother left Germany.

The current value of the oil painting has been appraised at $67,000 to $94,000 (US).

Stern, who died childless in 1987, left his estate to the Hebrew University of Jerusalem, McGill University and Concordia University, which is heading the international quest for the restitution of the more than 200 of Stern’s works that went on the block in Cologne in November 1937, as well as possibly an equal number that he was forced to sell off elsewhere from 1935 on.

Bissonnette’s stepfather, a Nazi party member, bought the painting ,titled Girl from the Sabiner Mountains, at the Cologne auction. She has said that her stepfather, Dr. Karl Wilharm, paid $3,600 for it and that she has the papers to prove it. She eventually inherited it from her mother’s estate.

Kline counters that because the painting was stolen that sale is invalid.

Bissonnette’s lawyer, David Levy, argued in the appeals court that the Stern estate waited too long to pursue a claim on the painting. He also noted that the painting in question was not among the works Stern himself listed in advertising he placed  in art publications after World War II in attempting to recover his collection.

The estate, Kline said, could not have made a claim on the painting any earlier because it had been kept in Bissonnette’s and her family’s homes all these years, except for a brief exhibition in Germany in the early 1950s.  

The estate learned of the painting’s whereabouts in January 2005, when Bissonnette put it up for sale through a Rhode Island auction house. After efforts to reach an out-of-court settlement failed, the estate launched legal proceedings in 2006.

Just before that lawsuit was filed, Bissonnette clandestinely shipped the painting to Germany, where it remains in a warehouse.

The three-judge appeals court did not indicate when it will make a decision.