Seattle Lawsuit Resolved - Seattle Art Museum and M. Knoedler and Company Inc. settle case over Matisse painting - Brief Article

Art in America, Dec, 2000 by Raphael Rubinstein

Bringing to a close a three-year dispute, the New York gallery Knoedler & Co. has reached an out-of-court settlement in a lawsuit brought against it by the Seattle Art Museum. The controversy began in October 1997, when suspicions arose that a Matisse in its collection, Odalisque (1927), had been stolen by the Nazis from the prominent Parisian art dealer Paul Rosenberg during the occupation of France [see "Front Page," Dec. `97]. The painting was donated to the museum in 1991 by local collectors Prentice and Virginia Bloedel (now deceased), who had bought it from Knoedler in 1954. For its part, Knoedler claimed to have purchased the painting, unaware of its past, from a reputable dealer in Paris that same year.

In June 1999, after researching the painting's provenance, the museum returned Odalisque to the Rosenberg heirs [see "Front Page, Sept. `99]. (The heirs subsequently sold the painting to Las Vegas casino tycoon Steve Wynn for a reported $2 million.) The museum then filed an $11-million lawsuit against Knoedler for fraud and misrepresentation. In order to bring this third-party suit, the museum first had to convince the Bloedel family to transfer to it all legal rights relating to the painting and its 1954 purchase from Knoedler.

The recent agreement stipulates that Knoedler reimburse the museum for all legal fees and costs, that the firm waive rights to a $143,000 award that a judge had previously assessed against the museum on a legal technicality, and that the long-established New York gallery hand over to the museum one or more works from its inventory (selected by the museum) as compensation for the Matisse or a cash payment equal to the market value of the returned painting. (Once the settlement was reached, the museum indicated that it plans to take the cash.) In return, the museum promises to withdraw all allegations against the gallery regarding the 1954 sale to the Bloedels.