Legal Matters

Case Against Nahmad Gallery Dismissed, Fight for Nazi-Plundered Modigliani Painting Will Continue

 Case Against Nahmad Gallery Dismissed, Fight for Nazi Plundered Modigliani Painting Will Continue

The work in question.

Philippe Maestracci, an Italian citizen fighting to recover a Modigliani painting once owned by his grandfather, Paris dealer Oscar Stettiner, and allegedly sold without Stettiner’s permission by the Nazis during World War II, has dropped his suit in federal court against the Upper East Side’s Helly Nahmad Gallery, which he argued was in possession of the work.

But the fight appears to be far from over.

Helly Nahmad and his attorneys had denied that the gallery owned the work, Modigliani’s 1918 Seated Man With a Cane, and claimed that it was actually owned by the International Art Center, a company run by Mr. Nahmad’s father, David Nahmad, which holds an estimated $3 billion to $4 billion work of art in Geneva, Switzerland. Mr. Maestracci, the dealer maintained, was suing the wrong entity.

On Monday, Mr. Maestracci asked for the suit to be dismissed, and the court approved that move yesterday. His attorney, Raymond J. Dowd, said that his client now plans to take his case to New York state court, suing the elder Mr. Nahmad and the International Art Center for the return of the painting. Mr. Dowd explained that, since Mr. Maestracci is a French citizen and David Nahmad is an Italian citizen who is domiciled in Monaco, the case lacked complete diversity jurisdiction, and could not technically continue at the federal level, echoing an argument that Helly Nahmad’s lawyers had made in filings.

Mr. Maestracci┬áis moving to New York court to address the diversity issue, Mr. Dowd said, and noted that David Nahmad has a residence in New York. When The Observer asked Mr. Dowd today to state his client’s position, he answered succinctly: “It’s ours, give it back,” and added later in the telephone conversation, of the complicated jurisdiction issues, that he believes: “You can run, but you can’t hide.” As of press time, the new suit had not yet been filed.

Though The Art Newspaper reported, via Artnet, that the Nahmads won the work at Christie’s London in 1996 for $3.2 million, documents show that IAC was the actual buyer. (One report puts the possible value of the painting at $18 million to $25 million today.) The painting was offered for sale at Sotheby’s New York in 2008, but failed to find a buyer. According to court filings, IAC was the seller at that time.

Mr. Maestracci has argued that the “International Art Center is an offshore entity used by the Nahmad defendants as an instrumentality to hold their interests in works.” His attorney, Mr. Dowd, noted that while the work is held by the IAC in Geneva, it is not clear that the the company is actually based there. “We don’t know what type of entity it is,” he told The Observer of the IAC.

Aaron Richard Golub, a lawyer representing Helly and David Nahmad in the case, said that he never understood why the suit had been filed in federal court. “It was in the wrong court,” he told The Observer today, adding that Mr. Maestracci will need to restart his litigation, and that no case is currently pending against his clients. If a suit is filed, he said, “My client is going to vigorously defend this.”

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