Court Tells Sotheby’s to Reveal Its Auction Clients in ‘Nazi-Loot’ Case

A judge in New York has opened a crevice in the traditional secrecy of the art market with a ruling that directed Sotheby’s to reveal who consigned and who bought a painting by Tiepolo, the Italian old master, that was sold at auction in 2019 for $100,000.

The ruling came in a case brought by three heirs of a Jewish art dealer named Otto Fröhlich, who say he lost the artwork during the Holocaust. The heirs sued Sotheby’s, saying they needed the names of the buyer and seller to pursue a claim for the return of the painting.

Auction houses have long kept the identities of buyers and sellers confidential to guard their privacy, but the lack of transparency in the art market has increasingly drawn attention. Though the U.S. government has decided against further regulation, critics have questioned whether the market, where millions of dollars routinely change hands, has become an unwitting haven for money laundering.

Several experts said the ruling, by a State Supreme Court justice, rendered in January but not previously reported, was unusual in that it directed that the auction house release the names of both parties in the transaction. While courts have sometimes directed that one party in a sale be named, the experts said, it is not typical for both to be revealed.

“This case certainly establishes clear precedent that where heirs provide support for their claims of restitution, auction houses will be required to disclose the names and contact information of the buyers and sellers of the claimed looted art and cannot hide behind confidentiality policies to refuse to do so,” said Geri S. Krauss, the lawyer for the Fröhlich heirs.

The order to disclose the names may soon be moot, though. Sotheby’s has rescinded the 2019 sale and has taken back possession of the painting, “St. Francis of Paola Holding a Rosary, Book, and Staff.” The auction house said it is in discussions to resolve the matter with the Fröhlich heirs and with relatives of another previous owner of the painting who are pursuing a competing claim.