Heirs of a German-Jewish businessman are suing New York’s Guggenheim Museum for a Pablo Picasso painting that he felt forced to sell under threat of the Nazis 85 years ago.

A lawsuit filed last week claims the artwork, Woman Ironing, painted in 1904, was sold under duress in 1938 as its owner, Karl Adler, hastily fled Nazi-led Germany with his wife, Rosi Jacobi.

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Woman Ironing by Pablo Picasso, 1904 (Alamy)

It was Heinrich Thanhauer, a Jewish art dealer in Munich, who sold the artwork to Adler in 1916.

Adler was one of the managers and owners of a large German leather manufacturing company but was forced to give up his board position when the Nazi rose to power. He fled Germany in 1938, hoping to amass enough money to reach Argentina, but moved across borders in the meantime.

The couple needed to cover the cost of visas and the Nazi-instituted flight tax, who also blocked access to their accounts in Germany. Adler was then effectively forced to sell the painting to Heinrich Thannhauser’s son, Justin for 6,887 Swiss francs (roughly £26,000 in 2023) which the complaint said was “well below” market value.

The plaintiffs in the case include the families of the great-grandchildren of Heinrich as well as charities linked to the family.

They are seeking the return of the Picasso that has hung in the Guggenheim since 1978 or a payment of between $100-$200 million for the artwork.

The case, which was filed under the provisions of the 2016 Holocaust Expropriated Art Recovery Act, may come down to whether the artwork was sold illegally or through extortion.

The filing reads that Adler “would not have disposed of the painting at the time and price that he did, but for the Nazi persecution to which he and his family had been subjected”.

Disputing the family's claims. the Guggenheim said the 1938 sale was a “fair transaction” and that the complaint is “without merit.”

Lawyers for the Guggenheim also claimed that "extensive research" demonstrates their rightful claim to the art.

They added: “There is no evidence that Karl Adler or his three children, now deceased, ever viewed the sale as unfair or considered Thannhauser a bad‐faith actor, either at the time of the transaction or at any time since”.

A recently passed New York law requires all art that “changed hands due to theft, seizure, confiscation, forced sale, or other involuntary means” in Nazi Germany to carry signage making visitors aware of the historical context.