Happy Monday, I’m Eriq Gardner.

Welcome back to The Rainmaker, a private email about money, power, fame, and, most of all, the law.

In today’s edition, a legal fight involving the Nazis, the Manhattan D.A., and an escalating international art ownership battle. Plus: Sam Bankman-Fried, Changpeng Zhao, Brian Roberts vs. Bob Iger, Donald Trump, Bob Woodward, Tim Sweeney, and more. (If your art buddy or political foe forwarded you this email, and you’d like to continue receiving this newsletter, click this link to subscribe.)

Let’s begin…

• The Next S.B.F.?: Now that federal prosecutors have convicted Sam Bankman-Fried, they might be tempted to shoot for the moon by indicting Binance C.E.O. Changpeng Zhao, too. In a civil suit brought by the S.E.C. in June, the government outlined potentially deceptive acts, including the allegation that Zhao commingled and diverted crypto assets in a way that flies in the face of conventional financial practices. It’s not a huge leap to envision a criminal prosecution, although bringing Zhao to the U.S. to face charges would be a notable hurdle. (Binance is challenging the S.E.C.’s jurisdiction and questioning its interpretation of securities laws in a pending motion to dismiss.)

  The S.B.F. trial highlighted the value of flipping top lieutenants: Caroline Ellison, Gary Wang, and Nishad Singh all testified. Who would play that role in a case against Zhao? There’s at least one clue, buried in a footnote in a court brief this past week, that seems noteworthy. It appears that Binance C.F.O. Jasmine Lee—the ex-PayPal executive who joined the company in 2022 as it eyed an I.P.O.—was recently fired. She’s on the government’s wishlist of people to speak with, along with Zhao himself.

• Valuing Hulu: For the past couple of weeks, I’ve been trying to confirm a tip that Comcast has been making the claim, in arbitration, that Disney intentionally devalued Hulu by taking some content off the platform to advantage Disney+. Alas, after reaching out to sources, it seems Comcast is not making this claim, even though there is a mysterious arbitration proceeding focused on Hulu’s failure to support an international version (The Wall Street Journal reported that detail in May).

  Of course, now that Disney has confirmed it will purchase Comcast’s remaining 33 percent stake in Hulu, and a valuation process is underway, this issue might still become a point of contention. Disney and Comcast are each having bankers appraise Hulu, and a third bank will get involved if the valuations differ by more than 10 percent. I can’t help but imagine how divergent these valuations could become when considering a “but for” world where, say, Hulu has access to Star Wars and Marvel originals, or Disney hadn’t pulled various FX shows from the platform. In any case, the entire situation represents an ironic coda to Comcast’s 2011 acquisition of NBCUniversal, which necessitated a consent decree that forced Comcast to give up influencing Hulu’s direction.

• A Bored Apes update: Before rolling out another Nazi-adjacent art story, I want to address my last one. In August 2022, I wrote about how Yuga Labs, the company behind the Bored Apes Yacht Club, sued conceptual artist Ryder Ripps over a copycat NFT collection, while Ripps argued he was merely exposing BAYC’s racist origins. Well, the defense didn’t work. In an Oct. 25 post-trial judgment (read here), a judge ordered Ripps to turn over more than $1.375 million in profits, $200,000 in statutory damages, and attorney’s fees and costs too. The judge also didn’t think much of Ripps’ argument that Yuga had dirtied its hands by hiring celebrity endorsers to pitch unregistered securities.

Until recently, one could confidently say that the Art Institute had dominion over the portrait. But as my partner Bill Cohan first reported in September, Manhattan District Attorney Alvin Bragg has been on a mission to return many Schiele artworks to the family of Fritz Grünbaum, the famous Jewish Viennese cabaret performer who perished in a Nazi concentration camp. Bragg’s efforts have resulted in several museums parting with their Schieles—the Museum of Modern Art and the Morgan Library, for instance, complied with relatively little resistance, while others, including the Carnegie Museum of Art and the Allen Memorial Art Museum, acquiesced when confronted with seizure warrants. The Art Institute, however, has taken a different stance: Russian War Prisoner, quite ironically, has become veritably imprisoned, removed from public display and tucked away in a temperature- and light-controlled backroom.

It’s now considered seized “in place,” languishing in a kind of legal limbo as a momentous court battle unfolds. The Grünbaum heirs—namely Timothy Reif, David Fraenkel, and Milos Vavra—are suing the Art Institute for ownership. In response, the Chicago museum adamantly claims to be the true owner. And now Bragg, himself, is on the brink of being pulled into the case: the Art Institute argues the D.A. is an indispensable party because his office now technically possesses Russian War Prisoner, despite the fact that the artwork remains physically on museum premises.

Now, as the case hurtles toward a major showdown before a New York federal judge on Thursday, the Art Institute is advancing an exceptionally aggressive legal posture. But the question remains: Why is the museum so staunchly defending its ground while others yielded their Schieles so willingly? Naturally, the answer is multifaceted. But according to my sources, the Art Institute is particularly concerned that, should the Grünbaum heirs recover the Schiele, a significant portion of its collection could be vulnerable to future restitution efforts. In other words, this is far more than a skirmish over a single expressionist sketch; there is indeed much more at stake.

You see, the most significant obstacle to reclaiming stolen art is often the passage of time. Although a legal recourse known as “replevin” can be employed to restore possession to a rightful owner, even in situations where stolen goods have gone into the hands of a good-faith purchaser, this claim typically comes with a statute of limitations.

Over the years, there has been a lot of discussion about the fate of art from Nazi-era Germany, as Hitler’s regime confiscated hundreds of thousands of works in one of the largest art heists of all time. To address the sense that it would be most indecent to deem Holocaust victims and their families as having waited too long to seek justice, the state of California passed a law in 2002 to extend the statute of limitations for the recovery of Nazi-stolen art. However, the 9th U.S. Circuit Court of Appeals subsequently ruled that such a law encroached on the federal government’s exclusive domain over foreign affairs. In response, Congress adopted the HEAR Act, and it was quickly signed by President Obama.

The legislation was uncontroversial at the time. Now, however, the HEAR Act is causing quite the commotion in the art world. Since the law gives those discovering their entitlement to Nazi-misappropriated art a fresh six years to file a recovery suit, many cases have only very recently come to the fore. The one initiated over Russian War Prisoner epitomizes the phenomenon, although it’s hardly the only example. Even Ronald Lauder, who once pushed Congress to do something about Nazi-confiscated art, is now surrendering pieces in his collection.

Indeed, we might be experiencing a golden age of art restitution cases. While much credit can be attributed to the change of law in the twilight hours of the Obama administration, there’s also the matter of what’s been occurring in New York City. Starting in the Trump years, the Manhattan D.A.’s office—first under Cy Vance, now Bragg—has made the repatriation of antiquities a law enforcement priority. Thousands of artworks, collectively worth several hundred million dollars, have been returned all around the world, to great acclaim.

Of course, museums are starting to fight back. One notable example came a couple weeks ago in Ohio, where the Cleveland Museum of Art sued Bragg in a bid to hold on to a very old statue of a Roman or Greek philosopher (speculated to be Sophocles), which the museum purchased in the 1980s and the country of Turkey now claims was taken. (Here’s the complaint.) Meanwhile, the Art Institute’s response to Bragg’s determined efforts to seize Russian War Prisoner now threatens to overwhelm everything else. Indeed, the arguments being advanced by the Art Institute have the potential to reshape the landscape of art ownership disputes and even draw in the Biden administration.

The intriguing question is: who originally provided them to the Swiss art gallery? In 2011, one federal judge accepted word that it was Elisabeth’s sister, Mathilde Lukacs, who sold them, suggesting that the Schiele collection had remained in the family and was not actually looted by the Nazis after all. However, in a separate case, a New York State judge considered the sister theory to be too speculative. She died in 1979, so it was hard to verify.

The Art Institute prefers the sister theory, obviously, but contends that it’s far too late to litigate any of this. Witnesses have passed away, and essential documents have been lost to time. And even if Grünbaum’s heirs had six fresh years to bring a case, the museum argues, the stopwatch started counting down from the moment back in 2006 when the heirs initially alerted the Art Institute about their claim regarding Russian War Prisoner.

This interpretation of the HEAR Act might be considered novel, but it pales in comparison to the groundbreaking proposition put forth by the Art Institute’s lawyers at Wilson Sonsini: that the HEAR Act is unconstitutional. How so? Their argument hinges on the legal concept of “adverse possession.”

More commonly known as “squatter’s rights,” adverse possession allows someone to obtain legal ownership of a property that belongs to someone else if they occupy it openly and without disturbance for a specified period. To illustrate, if a trespasser constructs a cabin on the corner of another person’s land, and the landowner takes no action, eventually that trespasser can claim rightful ownership of that corner. While the principle is widely acknowledged, it is typically applied to immovable property like real estate rather than chattel such as artworks. The Art Institute is now seeking to extend the principle to its adverse possession of Russian War Prisoner, arguing that to the extent the HEAR Act purports to deprive the museum of a vested right by retroactively reopening the statute of limitations, it violates the Due Process Clause of the Constitution.

Because the Art Institute is challenging the constitutionality of a federal law, the museum has recently provided notice to the Department of Justice, which may now intervene if the Biden Administration so chooses. This also seems like the sort of dispute with Supreme Court potential, although the case is at its earliest stages. A summary judgment hearing on Thursday will take up these issues, although it’s also possible that the case gets moved to another court thanks to some legal esoterica.

Raymond Dowd, the attorney representing the heirs, expressed his outrage at the Art Institute’s argument. “The Art Institute of Chicago has launched an attack on perhaps the most bedrock notion of private property in the U.S., that a true owner should be protected from theft by criminals,” he told me. “This is an argument that would likely horrify the little old ladies and high schoolers who visit the Art Institute of Chicago daily.”

The Art Institute, for its part, is standing by its position. “Every case is different and there are facts in our case that differentiate this item from works at other institutions,” a spokesperson told me. “We have done extensive research on the provenance history of this work and are confident in our lawful ownership of the piece.”

• Big law firms tend to be image-conscious and risk-averse, so it’s notable how they are throwing around their weight regarding the reaction on college campuses to what’s been happening in Israel. Here’s the letter penned by Joseph Shenker, senior chair of Sullivan & Cromwell, and signed by more than 100 law firms.

• It’s unsurprising but disappointing that the Department of Justice is taking the position (read here) that rules are rules and that Donald Trump’s forthcoming criminal trial can’t be televised. That said, I got a kick out of the D.O.J.’s assertion that the National Broadcasting Company (NBC) has a poor understanding of the word “broadcast.”

• Speaking of Trump, his lawyers are now crowing about securing a copyright registration that lists the former president as the co-author of Bob Woodward’s The Trump Tapes, an audiobook based on the legendary journalist’s interviews. Simon & Schuster is responding by pointing out that no one intended this to be a joint work. The publisher tells a judge it is evaluating its options to potentially seek a cancellation, which might mean telling the U.S. Copyright Office that Trump perpetrated a fraud.

• Today begins an important antitrust trial in San Francisco, pitting Fortnite publisher Epic Games against Google. The trial centers on Google’s control of the Android ecosystem, including rules for app distribution and its share of in-app purchase revenue. Epic, led by C.E.O. Tim Sweeney, is represented by Cravath, while Google is being defended by Morgan Lewis. The jury trial is playing out just as the Supreme Court is considering reviewing a similar case between Epic and Apple. In that case, a trial judge ruled that Apple’s 30 percent commission on purchases within Fortnite wasn’t anticompetitive but also limited Apple’s ability to prevent app developers from steering subscribers to sign up via web browser, where Apple couldn’t extract its fee.

  Interestingly, within Fortnite, users can purchase “emotes,” allowing them to perform brief actions like victory dances. For years, certain choreographers have been upset by the uncompensated misappropriation of their own dance routines. Many sued. And they lost and lost and lost… until last Wednesday, when the 9th Circuit revived a copyright case brought by Kyle Hanagami. Whereas previous suits failed, this time the 9th Circuit panel held that “short does not always equate to simple. … It appears that the allegedly copied portion is far more complex than other routines the Copyright Office has deemed uncopyrightable.”

  Here’s the full opinion, which also serves as a reminder that there are often individuals lower in the hierarchy who seek equitable treatment.