Two famed early works by Pablo Picasso will stay in New York City museums after the institutions reached an out-of-court settlement over a lawsuit alleging the previous owner was forced by the Nazis to sell his artworks in the 1930s.

The settlement was announced in Manhattan federal court on Monday as the case was about to go to trial. Details of the settlement were not released.

The museums had denied that the paintings were obtained under Nazi duress.

The family of a Jewish banker sued the Museum of Modern Art and the Solomon Guggenheim Foundation for the paintings, Picasso's “Boy Leading a Horse,” owned by MoMA, and the Guggenheim's “Le Moulin de la Galette.”

U.S. District Judge Jed Rakoff concluded last week that the family of Paul von Mendelssohn-Bartholdy, who died in 1935, had produced enough evidence for the case to go to trial.Before his death, Mendelssohn-Bartholdy took steps that Julius H. Schoeps, said were intended to protect his estate and art collection. Mendelssohn-Bartholdy was Schoeps' great-uncle.

The two paintings, which both date from the early 1900s, were sold to the Jewish art dealer Justin Thannhauser in 1934 or 1935. Thannhauser fled Germany and spent much of the war in Switzerland. He kept “Le Moulin de la Galette” until 1963, when he gave it to the Guggenheim museum.

It was painted in 1900, according to the museum's Web site. He sold “Boy Leading a Horse” to former MoMA chairman William Paley in 1936. Paley gave it to MoMA in 1964, according to the museum's Web site, which dates the painting from 1905-06. Picasso was born in 1881 and lived until 1973. On Monday, the judge criticized the fact that the settlement will not permit the public to find out the history of the paintings. “I find it extraordinarily unfortunate that the public will be left without knowing what the truth is,” Rakoff said.