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Tax break allows owners of Nazi-looted art to keep paintings

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The painting Happy Family in Garden by Otto Reichert is one of two Nazi-looted works whose value has been restituted to the Max and Iris Stern Foundation.

Two more Nazi-looted paintings have been restituted to the Montreal-based Max and Iris Stern Foundation, bringing the total number of works recovered to 20 since the Concordia University-administered Max Stern Art Restitution Project was launched in 2002, it was announced on June 20.

Two German auction houses, working with their clients and New York State’s Holocaust Claims Processing Office, settled claims on paintings submitted by the Stern Foundation and its three university beneficiaries: Concordia, McGill University and the Hebrew University of Jerusalem.

What was different about this restitution was that those who held the paintings were allowed to keep them, while the foundation was fully compensated for their value under a new tax incentive.

The German Friends of Hebrew University (GFHU) has created a program to encourage those in possession of the late German-born Montreal art dealer Max Stern’s property to return it, in exchange for tax receipts from the charitable organization, which are recognized by the German government.

It is the first such incentive ever to be offered to Germans holding despoiled works from the Nazi era.

“We are extremely pleased to be working in such a forward-looking manner with the Stern Foundation, to benefit Hebrew University in dealing with these historical wrongs,” said Gunter Stock, GFHU’s president.

READ: THE HOLOCAUST AND RESTITUTION OF CONFISCATED ART – PART 4

Happy Family in Garden by Otto Heichert (1868-1946) was one of Stern’s paintings that was forcibly sold in 1937.

A resident of Duesseldorf, where Stern lived, during his early career, Heichert completed numerous portraits for the upper middle class. His work is in museums in Berlin, Duesseldorf and Antwerp.

Happy Family in Garden re-surfaced in 2018 at the Hargesheimer Kunstauktionen auction house. Following exchanges with it, a settlement offer was made that allows the purchaser to keep the painting, while fully compensating the Stern Foundation through the GFHU program.

Stormy Sea by Martinus Schouman (1770-1838) was in the Galerie Stern inventory in 1935. Schouman was a celebrated painter of Dutch marine scenes, whose work was collected by King Louis Napoleon.

Stormy Sea last appeared on the market in 2014 at Ketterer Kunst in Hamburg. The buyer of the work, a collector from southern Germany, preferred to retain the painting and the Stern heirs were fully compensated.

“The restitution of these two works is an acknowledgement of how, from 1933 to 1945, Jewish art dealers in Germany were not operating freely in the art trade. They were seen first and foremost as Jews in the eyes of the Nazi regime, subject to all the persecutorial measures of the fascist government,” said the Stern Foundation’s Clarence Epstein.

“Every effort should be made to find fair and just solutions for wrongful property seizures, such as confiscations, forced sales and sales under duress. The Heichert and Schouman cases are moves in the right direction.”

Supported by the German government, the Munich-based work of the Canadian-Israeli-German Stern Co-operation Project is documenting the history of the Stern family and its role in the arts. The research aims to shed light on Nazi-era activities and to encourage the art trade in Germany to be more proactive in righting the injustices of their predecessors, Epstein said.

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