-JO Jacob Friedman, Estelle Sapir and Miriam Stern, on Behalf of Themselves and All Others Similarly Situated v. Union Bank of Switzerland, et al. (See Doc. No. 897)

Filing 4817

MEMORANDUM AND ORDER, it is impossible to conclude that the issues raised on appeal constitute a plausible suggestion of error. The appeal is denied. Ordered by Senior Judge Edward R. Korman on 3/15/2012. (Greene, Donna)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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x
Case No. CV 96-4849 (ERK)(MDG)
(Consolidated with CV 96-5161
and CV 97-461)

IN RE: HOLOCAUST VICTIM ASSETS
LITIGATION

----------------------------------------------------------MEMORANDUM & ORDER

FILED

This Document Relates to: All Cases

IN CLERK'S OFFICE
US DISTRICT COURT E.D.N.Y.

----------------------------------------------------------KORMAN, Judge:

)(

*

MAR 1 6 2012

*

BROOKLYN OFFICE

I have before me an appeal from the Claims Resolution Tribunal's (hereinafter "CRT")
decision in In re Holocaust Victim Assets Litigation, Case No. CV96-4849 (In re Accounts of

Siegfried Levy, Sigfried Levy, Paula Levi, and Schuhkonzern Aktiengesellschaft Zurich) (the
"Decision"). The Decision, which was approved by this Court on December 27, 2011, was
issued to claimants
_

the latter three of whom are represented by the law firm of von Trott zu Solz Lammek.

Dr. Imke Gielen of that law firm filed an appeal on behalf of that firm's clients (the
"Appellants") regarding the denial to the accounts held by Schuhkonzern Aktiengesellschaft

Zurich ("Schuhkonzern"), specifically with regard to a custody account numbered 26252 that
held common shares of Luwal AG worth 590,000.00 Reichsmark ("RM") (nominal value) and a
demand deposit account, also numbered 26252, that had been established to receive any dividend
payments due on the shares.
The grounds for the denial are summarized, as follows, in the last four paragraphs of the
Decision:

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The CRT notes that in his 19 December 1936 asset report,
Siegfried Levi valued his shares of Schuhkonzern at RM
215,000.00, and explained that Schuhkonzern was a holding
company which held Luwal common shares worth RM 590,000.00.
In this report, Levi also noted that Schuhkonzern also held shares
of the company Titania AG in Budapest, but that this company had
been in liquidation since 1931, so that he considered these assets to
be without value. As detailed above, in the declaration of assets
dated 27 October 1937, Schweizer [an attorney acting for
Schuhkonzern in Zurich] included the Schuhkonzern shares in a list
of securities owned by Levi. Schweizer stated that the shares had
no value, that the only assets held by the firm were the Luwal
common shares with a nominal value of RM 590,000.00, and that
these shares were pledged as security to the Bank for a debt in the
amount of approximately SF 42,000.00 owed to the Bank by
Schuhkonzern. Schweizer noted that upon payment of this debt,
Schuhkonzern agreed to transfer the shares to an account at a
German bank in the name of Siegfried Levi. As noted above,
according to a report dated 25 March 1938 of the Luwal board,
these shares had been delivered to an account at the Deutsche Bank
und Diskonto-GesellschaJt in Stuttgart.
The CRT therefore
concludes that the Luwal shares, which comprised the sole asset of
value in the account, were transferred to an account in Germany in
the name of Siegfried Levi, and the account, along with the related
demand deposit account, was subsequently closed.
With regard to the value of the Luwal shares and the value of any
dividends that may have accumulated in the demand deposit
account, the CRT notes that after the War, Siegfried Levi and his
heirs pursued numerous claims to reclaim the value of Luwal. As
detailed in the 1998 Partial Decision, the aryanizers "purchased"
the shares for RM 240,000.00, or 40 percent of the total RM
600,000.00 nominal value of the shares. In 1953, Siegfried Levi
received a total of DM 30,000.00, which represented the
Reichsmark equivalent of RM 300,000.00. The 1998 Partial
Decision noted that in 1976, the Stuttgart Compensation Office
held that Levi had suffered damages in the amount of RM
1,290,000.00 through the forced sale of Luwal, and that he had
already received DM 30,000.00 (RM 300,000.00) in 1953 as
compensation for these damages.
As noted above, the 1998 Partial Decision formed the basis for
seven additional payments to the Claims Conference issued as
compensation for the loss of Luwal. These payments totaled €
2,578,117.22, of which the Cassel Claimants received €
2,039,234.03.
[Footnote explaining that the € 2,578,117.22

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amount received by the Claims Conference with regard to its claim
for Luwal was equal to DM 5,042,359.00 omitted.] The CRT
notes that Landesamt in Brandenburg, which issued the 1998
Partial Decision, carefully reviewed the history of Luwal, and that
the subsequent payments covered both real estate and other assets
owned by the company. The CRT also notes that the Luwal shares
that had been in custody account 26252 at the Bank did not have
any intrinsic value, but rather represented the value of the
company. Given that the value of the company was extensively
reviewed and considered by the Landesamt in reaching its
decision, and that payments totaling € 2,578,117.22 - in addition to
the payments equaling RM 540,000.00 previously received by Levi
- were made as compensation for the losses associated with the
aryanization of Luwal, the CRT concludes that Siegfried Levi
andlor his heirs were fully compensated for the value of the Luwal
shares, as well as any dividends that might have accumulated.
Therefore, no additional award is appropriate.
With regard to all three accounts, the CRT notes in all the claims
for restitution and compensation filed after the War by Siegfried
Levi and his heirs, no claim was made for any other assets held by
Schuhkonzern. This strongly supports the conclusion that the
Schuhkonzern accounts at the Bank did not contain any assets other
than the Luwal shares, the value of which were fully restituted to
Siegfried Levi's heirs. Accordingly, and given the considerations
listed above, no award is appropriate in this case.

The denial of the claims to the accounts belonging to Schuhkonzern was clearly correct
and in accord with CRT precedent. The two letters filed in support of the appeal contain no
plausible suggestion of error, as required by the CRT rules. Consequently, the appeal is subject
to summary denial.
I add these brief words about the grounds for appeal that are specifically mentioned in the
two appeal letters, namely, that the CRT did not consider the findings of the Landesamt that the
Schuhkonzern shares were transferred to a blocked account, and therefore confiscated by Nazi

authorities; and that the CRT did not consider the dividends that accrued on the Schuhkonzern
shares and that were then deposited in the claimed demand deposit account. The Appellants also

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claim that the CRT wrongfully stated that they were fully compensated because the Claims
Conference was awarded € 2,578,117.22, but they received € 2,039,234.03, so that the Claims
Conference "kept an amount of 538,883.19 Euro for itself." Letter of Dr. Imke Gielen to the
Court, dated January 20, 2012.

Finally, the Appellants assert that "there is no rule in the

Governing Rules pertaining that claims against Swiss banks have to be rejected because
claimants sought for (and received) compensation from the German Government [sic].
Especially as payments made by the German Government do not extend to lost Swiss bank
accounts and the claimants were not fully compensated for Luwal in Germany." Id. [Emphasis
in the original.]
With regard to the Appellants' assertion that the CRT failed to consider that the Luwal
shares were transferred to a blocked account, I note that the Decision clearly acknowledges that
the Luwal shares held in the custody account belonging to Schuhkonzern were confiscated by the
Nazis. In denying the claim, the CRT nevertheless determined that no award was appropriate
because the value of the assets in the accounts was restituted to the account owner or his heirs
after the War. Thus, the Decision cited the 1998 Partial Decision and noted that in 1976, the
Stuttgart Compensation Office had determined that the value of the Luwal shares was RM
1,290,000.00. The 1998 Partial Decision noted that Levi received RM 240,000.00 from the
"aryanizers," and that in 1953 he received 30,000.00 Deutschmark ("DM"), which, at the
conversion rate of DM 1.00

=

RM 10.00, was the equivalent of RM 300,000.00. Thus, prior to

the 1998 Partial Decision, Levi had received RM 540,000.00 for the value of the Luwal shares,
which in 1976 was determined to be RM 1,290,000.00, leaving a non-restituted amount of RM
750,000.00. The Decision noted that, on the basis of the 1998 Partial Decision, seven payments
totaling € 2,578,117.12 were issued as compensation for the loss of Luwal. The decision noted

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that this amount was equal to DM 5,042,359.00. At the same DM 1.00 = RM 10.00 conversion
rate, this amount was the equivalent of RM 50,423,590.00. Thus, it is clear that the amount of
restitution received based upon the 1998 Partial Decision (€ 2,578,117.12, equal to RM
50,423,590.00) exceeded the value of the Luwal shares not previously paid or restituted to
Siegfried Levi, as determined by the Stuttgart Compensation Office in 1976 (RM 750,000.00).
With regard to the Appellants' assertion that the CRT did not consider the dividends that
accrued to the demand deposit account, I note that in an appeal letter dated March 2, 2012, the
Appellants submitted a copy ofthe business report for Luwal for the year 1936-37, dated July 21,
1937, which states in translation: "It is suggested to pay a dividend in the amount of 5% from
the profit in the amount of RM 80,825.46, from RM 600,000.00 share capital - RM 30,000.00 to
the shareholders and to carry forward the remaining amount of RM 50,825.46 on to a new
account." Letter of Dr. Imke Gielen to the Court, dated March 2,2012. Appellants argue that if
Luwal's dividend payments were transferred to its shareholders Shuhkonzern and Siegfried Levi

via the demand deposit account numbered 26252, then they are entitled to a compensation for
these funds.
I note, however, that the Decision clearly refers to any such dividends when concluding
that Siegfried Levi and/or his heirs were fully compensated:
Given that the value of the company was extensively reviewed and
considered by the Landesamt in reaching its decision, and that
payments totaling € 2,578,117.22 - in addition to the payments
equaling RM 540,000.00 previously received by Levi - were made
as compensation for the losses associated with the aryanization of
Luwal, the CRT concludes that Siegfried Levi and/or his heirs
were fully compensated for the value of the Luwal shares, as well
as any dividends that might have accumulated.

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Decision, page 11. [Emphasis added.] I also note here that, unlike the case for the Luwal shares
in the custody account, there is no evidence that the dividends that were distributed were ever
repatriated to the Reich and confiscated by Nazi authorities.
The Appellants also claim that the CRT wrongfully stated that they were fully
compensated because the Claims Conference was awarded € 2,578,117.22, but they received €
2,039,234.03, so that the Claims Conference "kept an amount of 538,883.19 Euro for itself."
The Decision clearly explained why the full amount received by the Claims Conference as
compensation for the Luwal assets was not transferred to the Appellants:
Following the reunification of Germany in 1990, laws were
enacted for the restitution of property that had been nationalized in
the former East Germany. After the expiration of claim filing
deadlines in Germany on 31 December 1992 for real estate and 30
June 1993 for movable property, the Claims Conference became
the legal successor to unclaimed Jewish assets in the former East
Germany.
Under the Claims Conference's Goodwill Fund,
established in 1994, former Jewish owners and their heirs who had
missed the German deadlines could apply for the proceeds of
restituted properties or compensation payments that the German
restitution authorities had awarded to the Claims Conference,
minus a fee for services. Under this scheme, eligible applicants
such as the Cassel Claimants [the Appellants] received
approximately 80 percent of any amount awarded to the Claims
Conference.

Decision, page 4, note 11. Thus, the "deduction" in the amount of€ 538,883.19 was a fee for
services rendered by the Claims Conference -- without which the Appellants would have had no
claim to German restitution at all. After reunification, the "Claims Conference 'conducted a
massive research effort to identify all possible Jewish properties,' because in the event that no
claim was submitted, 'these Jewish assets would have otherwise remained with either the
'aryanizer' or the successor government to the Third Reich. ,,,

See Plan of Allocation and

Distribution o/Settlement Proceeds, Vol. II, at E-70. The Claims Conference filed over 81,000
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claims; most property subsequently was claimed by the fonner owners or heirs, but "those who
did not meet the deadline had no legal recourse against Gennany. Although the 1990 legislation
did not obligate the Claims Conference to consider such late claims, in 1994, the Claims
Conference established a 'Goodwill Fund' to share certain of the proceeds from property sales
with late-filing heirs." Id. The proceeds not paid directly to the heirs "have been utilized mostly
to fund relief programs for needy elderly Jewish Nazi victims around the world," id., the same
programs supported by this settlement through the cy pres remedy adopted on behalf of the
Looted Assets Class.
The fact that the restitution was initiated by and ultimately shared with the Claims
Conference does not alter the fact that, based upon the 1998 Partial Decision, a total of €
2,578,117.22 was restituted based upon the Appellants' claim to Luwal assets.
Finally, the Appellants assert that their claim should not be rejected simply because they
sought and received compensation for their family's losses in Gennany.

This argument is

frivolous and disingenuous. In all cases in which an award recommendation is made, the CRT
considers the issue of who received the proceeds of the claimed accounts. If an account owner
received the full proceeds of a claimed account, either at the time of the account closing or later
during restitution proceedings, the CRT has concluded that no award is appropriate. See In re

Account of Eduard Schwarzschild (approved on 13 February 2009) (finding that payments
received from the Gennan government in 1962 fully restituted the value of the account owner's
assets that had been deposited in Switzerland). If partial restitution was received, this amount
has been deducted from the total amount awarded. See, e.g., In re Accounts of Erwin and

Babette Koblitz (approved on 29 May 2007); In re Accounts of Sara (Siirle) Levi, Martha
Baldauf, and Isle Lebrecht (two awards approved on 25 October 2004 and 30 December 2004,

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award amount amended on 19 January 2010); In re Account of Gamliel Appel (approved on 26
November 2008); and In re Assets of Gertrude Low and Marianne Hamburger-Low (approved
on 21 December 2009).

In each of these cases, documented amounts of partial restitution

received were deducted from the final award amounts.

In the present case, the restitution

previously received fully compensated the Appellants for the Luwal shares and any dividends
that may have accrued. Accordingly, as the Decision properly concluded, no further award is
appropriate.
For the foregoing reasons, it is impossible to conclude that the issues raised on appeal
constitute a plausible suggestion of error. The appeal is denied.
SO ORDERED.
Brooklyn, New York
March 15,2012

s/Edward R. Korman
Edward R. Korman
Senior United States District Judge

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