It's really difficult to believe that she was unaware of the general problem of art stolen from Jews by the Nazis ~ she certainly had more opportunity to find out about it that most other people.
This was never a secret in the postwar perior, common practice assumed prior owners had no recourse. Lawsuits filed in the late 1940s yielded no results. Just as you couldn't collect dad's insurance benefit, because Auschwitz didn't issue death certificates, Goebbels didn't give receipts for confiscations, so how would you prove ownership. A catalog? Witnesses? Didn't work. And face it, most of the owners weren't coming back, didn't have survivors, and if they did they were far removed from ownership issues, and certainly from documentation.
Sotheby's knew, if she didn't know, she did later.
An interesting personal dilema, made more interesting by the fact that she prevailed legally.