The Texas museum said it made a legal filing in Potsdam on Thursday. It said in a statement that "based on the facts of the provenance research, the museum stands by its ownership of 'Regatta in Venice.'"
It said in its filing that no proof has been presented that the plaintiffs are Levy's rightful heirs, and that Levy didn't claim compensation for the piece in 1956 when he filed claims for other pieces in his collection, among them other pieces by Cross.
A lawyer for the heirs, Christoph Partsch, said last week that the painting was confiscated by the Nazis in 1940. He said his clients had found out only now about the existence of the missing painting and were demanding its return. He said the family lives in Europe, but didn't want to further identify them.
The Houston museum said the painting was restituted in 1949 to Natasha Flieglers, a Paris-based collector then living in New York, and that she consigned it to the Pierre Matisse Gallery in New York for sale in 1953.
The following year, it said, the painting was sold by the gallery to Oveta Culp Hobby, who donated it to the museum in 1958. It said "this is contrary to the claimants' assertions that the painting was smuggled out of France by Mrs. Hobby."
It wasn't immediately clear when the Potsdam state court will rule on the claim.