Lady in Waiting 

Looted Picasso seized by feds until courts can sort out who owns it.

The epic custody battle over the $10 million Picasso painting Femme en Blanc has just taken an unexpected twist: The Lady in White is now under house arrest.

This past summer we chronicled the legal adventures of Tom Bennigson, a recent UC Berkeley law school grad, who is locked in litigation with wealthy Chicago art collector Marilynn Alsdorf over the Picasso ("The Ten Million Dollar Woman," feature, 8/4). Bennigson maintains that the painting was originally owned by his grandmother, then looted by the Nazis after she fled Germany during the Second World War. The painting was missing for decades before finally resurfacing in a Parisian art gallery. It then changed hands several times before being sold to the Alsdorf family in the United States.

The suit is the result of a bitter split over whether the painting should be returned to Bennigson, its original heir, or remain with Alsdorf, who didn't know she was purchasing stolen property. In December 2002, Bennigson's attorney filed a temporary restraining order to keep the painting in California -- where it was being held in a gallery for sale -- until the suit was resolved. Then, in a highly controversial eleventh-hour move, Alsdorf had the painting flown back to Chicago. Alsdorf's attorneys say she ordered the painting's removal before the restraining order was filed, while Bennigson's side characterizes her action as a deliberate attempt to evade California court jurisdiction.

Last month, however, the US Attorney's Office in Los Angeles decreed that Alsdorf had knowingly transported stolen materials across state lines, and ordered the Picasso forfeited. Then last week, federal agents raided Alsdorf's home and "seized" the painting -- or, rather, put a tag on it telling everyone to keep their hands off. "Anybody who moves it is violating federal law and can be put in jail," says Bennigson's attorney, E. Randol Schoenberg.

All parties with a claim to the painting will now have to argue their case before a federal judge. Roscoe Howard, a former US attorney who is representing Alsdorf for this portion of the litigation, notes that the feds frequently assert rights over disputed property. "The real question is whether this is an appropriate action for this painting," the lawyer says.

In addition to the federal forfeiture proceedings and the appeal of Bennigson's original suit against Alsdorf, which will go before the California Supreme Court next year, two more lawsuits have recently been filed regarding Femme en Blanc. Alsdorf filed a complaint asking a judge to declare the painting hers; Bennigson's attorney, meanwhile, filed a lawsuit targeting Stephen Hahn, the Santa Barbara art dealer who sold the Picasso to Alsdorf, alleging that the profit he made from selling the stolen masterpiece should belong to Bennigson. No one -- including the feds -- can say if a ruling in one of these cases might preempt the others, or set a time frame for the resolution of all this legal sparring. Suffice to say that the courts are still trying to resolve the standoff in a similar dispute over Egon Schiele's Portrait of Wally, another Nazi-looted artwork, which started when US authorities seized it back in 1998.

But after fighting an uphill battle with the argument that California courts should be granted jurisdiction in a dispute stemming from a long-ago Nazi crime, Bennigson interprets the federal seizure as a positive sign. "Courts listen a lot more to the US Attorney's Office than to some funky art lawyer," he says wryly.

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