The case of the pieces belonging to the Feldmann family  in the British Museum’s collection had a lot of press coverage last year. The government used it to highlight why a change in the law was required to allow art looted by the Nazis to be returned to their descendents (it is always limited to these cases – quite why no other cases should be given the same treatment is unclear).
It now appears that the British Museum may be settling the case by avoiding the British Museum Act completely & offering the Feldmann family financial compensation instead (this is allowable under current laws).
The fact that it is necessary to take actions like this only further serves to illustrate the problems inherent with the anti-deaccessioning clauses in the British Museum Act.
The case of the Benevento Missal mentioned at the end of the article was covered in more detail here .
The Art Newspaper 
Two British museums pay compensation to keep Nazi loot
The British Museum and Glasgow Art Gallery are righting wartime wrongs
Posted 06 February 2006
By Martin Bailey
LONDON. Two Nazi-era spoliation claims against UK museums are being resolved, with the payment of financial compensation to the descendants of the pre-war owners. The cases involve the Feldmann drawings at the British Museum and a still-life painting at Glasgow Art Gallery. These works of art will now remain in the two collections, on a sound legal basis.
The claim for the British Museum drawings was made in 2002 by Tel Aviv-based Uri Peled, a descendant of Brno lawyer Dr Arthur Feldmann. In 1939 Dr Feldmann’s collection was seized by the Gestapo, with four drawings ending up at the British Museum in 1946-49. These were by a follower of Martin Schongauer, Niccolò dell’Abate, Nicholas Blakey and Martin Johann Schmidt (The Art Newspaper, October 2002, p.23).
The British Museum accepted the validity of the Feldmann restitution claim, but, under UK law, it is unable to deaccession unique items. The museum appealed to the Attorney General, to ask whether it could exceptionally return Nazi-era spoliated works, but the response last year was that this was not permissible under existing legislation (The Art Newspaper, July-August 2005, p.53). Subsequent discussions with Mr Peled’s side led to a decision to accept financial compensation.
We understand that in December the British Museum and the claimant jointly approached the government’s Spoliation Advisory Panel, to ask for recommendations. This is expected to lead to the panel suggesting the sum for an ex gratia payment and proposing whether it should come from the British Museum or the Department for Culture, Media and Sport. In 2002, the British Museum valued the four drawings at around £185,000, although the claimant is now asking for a higher amount. The Spoliation Advisory Panel’s recommendations are expected within a few months.
In the Glasgow case, the claim was for a still life painting, Le paté de jambon, which is now regarded as being by a follower of Chardin, and therefore of modest financial value. The claim came from the descendants of the owners of the Munich-based A.S. Drey Gallery. In March 2005 Glasgow City Council offered £10,000 to the heirs, following a November 2004 report by the Spoliation Advisory Panel supporting the claim since the picture had been put into a forced sale in 1936.
No announcement has been made, but last month a Glasgow Council spokesman confirmed to The Art Newspaper that “a payment has been made”. It is assumed this was for the proposed £10,000.
This leaves the Benevento Missal as the only work in a UK collection which the Spoliation Advisory Panel has recommended should be restituted to its pre-war owner. Last March the panel recommended that the 12th-century manuscript should be returned by the British Library to the cathedral library of Benevento (The Art Newspaper, May 2005, pp.10-11). Formal restitution will require a change in UK law, since the British Library is legally unable to deaccession the manuscript. In the meantime, negotiations are underway for the loan of the missal to Benevento, and this could lead to its return within the next few months, pending legal restitution.