
Pablo Picasso, "Boy Leading a Horse,” 1906, oil on canvas, 7 feet 2 7/8 inches by 51 5/8 inches. The Museum of Modern Art, New York. The William S. Paley Collection. ©2009 Estate of Pablo Picasso/Artists Rights Society (ARS), New York.
:An eleventh-hour settlement will ensure that two iconic Pablo Picasso works stay on in Manhattan museums, where they have hung since the 1960s.
A joint statement from the Museum of Modern Art and The Solomon R. Guggenheim Museum, released February 2, was brief and sparse on details. The two museums had "reached an agreement with the heirs of Paul and Elsa von Mendelssohn-Bartholdy"…ensuring "the continued ownership of these masterpieces by the museums."
The two paintings in question are "Le Moulin de la Galette," 1900, which was donated to the Guggenheim in 1965, and "Boy Leading a Horse," 1906, which was gifted to MoMA in 1964. Both works trace their provenance through Jewish art dealer Justin K. Thannhauser, a family friend of the paintings' original owner, German banker Paul von Mendelssohn-Bartholdy, who died childless in 1935.
In October 2008, the two museums jointly filed a motion with the US District Court, Southern District of New York, requesting the court declare them the paintings' rightful owners in response to a claim from Julius H. Schoeps of Germany, the grandson of one of Mendelssohn-Bartholdy's siblings. A trial had been slated to go forward February 2, the same day the settlement agreement was announced.
According to the museums, Paul von Mendelssohn-Bartholdy had given the paintings to his second wife, Elsa, in 1927. The heirs claimed the paintings were sold under duress as the Nazi regime gained power and fought to reclaim the works.

Pablo Picasso, "Le Moulin de la Galette,” Autumn 1900, oil on canvas, 34¾ by 45½ inches. Solomon R. Guggenheim Museum, New York, Thannhauser collection, gift, Justin K. Thannhauser, 1978.