A US$12 million (£9 million) painting sold under duress in Nazi-occupied Austria will go under the hammer at Sotheby’s this month.

‘City in Twilight (The Small City II))’ (1913) is considered one of the finest privately-owned landscapes painted by Egon Schiele. It was purchased in 1928 by Elsa Koditschek, a young Jewish widow living in Vienna. Following the German annexation of Austria in 1940, Elsa’s three-storey home was confiscated and SS officer Herbert Gerbing moved in to the first floor. Elsa was permitted to stay on living in the second floor apartment with her long time tenant, “Aunt” Sylvia Kosminski but soon fled, leaving behind the Schiele landscape, when she received an order for her deportation to the Lodz ghetto in Poland.

It was while seeking refuge in the home of a family called Heinz and surviving on food provided by “Aunt” Sylvia that Elsa is thought to have been forced to sell the painting. One day “Aunt” Sylvia arrived at the Heinz apartment to say she needed to sell Elsa’s pictures for the money. The painting was sold on several times before it came into the possession of the current owners who wish to remain anonymous. Sotheby’s has now negotiated a deal between the current owners and Elsa’s heirs who will share in the proceeds of the sale in New York on 12 November 2018.

The Koditschek family never knew of the existence of the Schiele landscape before they were contacted by Sotheby’s in 2014. Worldwide head of restitution, Lucian Simmons, happened upon a reference to the family while researching the provenance of an unrelated painting and he realised the family had lost an important work during the war. Simmons was able to substantiate his findings using a rich archive of correspondence written by Elsa on onionskin during the war and carefully stored in a relative’s basement.

“It’s so unusual to have a victim of Nazi theft or expropriation who writes everything down,” Simmons said. “Usually you’re trying to join the dots, but the dots are far apart.”

One of Elsa’s letters also captures a remarkable twist in her tale of survival in the face of Nazi persecution. So desperate were her circumstances that was eventually forced to return to hide in her former home even while SS Officer Herbing still lived there. In a letter she later penned to her son Paul who moved to New York, Elsa marvelled at having shared a roof with an SS Officer. At the time, she does not appear to have been aware that he was instrumental in the arrest and deportation of Jews from Austria.