Restitution Firm Settles Legal Dispute Over Painting Returned by MoMA

A long-running legal dispute over a Marc Chagall painting that was returned by the Museum of Modern Art in New York to relatives of its original owner has been settled, according to a report by the Art Newspaper.

Chagall’s Over Vitebsk (1913), depicting an elderly man flying above the Belarusian village of Vitebsk, reportedly valued at $24 million, was the subject over a disagreement over fees related to the painting’s restitution to the museum. The work was returned by MoMA in 2021, effectively settling a legal claim over its ownership, but that was not known until earlier this year, when news of it emerged in a legal filing.

German gallerist Franz Matthiesen initially owned the work. Per the work’s provenance, the painting’s ownership was transferred to a German bank via a “forced sale” in 1934, not long after the Nazis rose to power. Then, in 1949, it was purchased privately by MoMA, residing there for decades.

The work’s heirs, Matthiesen’s descendants, entered into the legal dispute in February 2024 over the terms of the work’s return with the Mondex Corporation, a restitution research firm based in Toronto hired to liaise with MoMA over research on the case, per court records reviewed by the Times. Matthieson’s heirs first approached Mondex in 2018 to work on the dispute.

The heirs claim the Canadian firm breached its contract by leaving them out of negotiations over an agreement to provide a $4 million compensation to MoMA, alleging that they never approved terms of the deal. They argued Mondex lost entitlement to the $8.5 million fee stipulated in their contract between them because of the error.

In February, James Palmer, founder of the Mondex Corporation, denied that the fee was negotiated improperly.

The circumstances of the work’s 1934 sale are still debated. A 2017 book by researcher Lynn Rother suggests the sale was voluntary. Records indicate that the work was sold at a price well below its market value at the time—evidence, Mondex contends, that the work was sold under duress to settle a bank loan.

Palmer and Franz’s son, Patrick Matthiesen, who filed the lawsuit on behalf of his relatives, settled the dispute out of court. Terms of the settlement were not disclosed.