One day this past August, an executive from Antiquorum, the top auction house for watches, stopped by the Geneva residence of the company's co-founder, a flamboyant Italian named Osvaldo Patrizzi. Antiquorum's board had fired Patrizzi days before, and the executive wanted to make sure he had vacated the company apartment. He had, but he'd left one thing behind. As a parting gift to his corporate masters, Patrizzi left a human skull on the fireplace mantel.

Antiquorum dominates the rarefied world of vintage-watch auctions. With a reported $100 million in annual sales, it's bigger than the watch departments at Christie's and Sotheby's combined. The company claims a host of records, including one for the most expensive wristwatch ever auctioned: a platinum Patek Philippe from 1939 that sold for $4 million. So it was no small matter when the board decided to remove Patrizzi, who is credited with creating the auction market for watches. Artist House, a publicly traded Japanese company, paid $30 million for a 50 percent stake in Antiquorum in 2005. Much of that value, observers say, came from Patrizzi himself.

The battle at Antiquorum has left the company and its co-founder badly shaken. The two sides are fighting over $5 million in company money that was transferred to Patrizzi's personal bank account. Also in dispute is the ownership of two of the most valuable watches in the world, which Patrizzi removed from a company  safe weeks before his firing. And an October article in the Wall Street Journal suggested that Patrizzi allied with watchmakers to surreptitiously drive up prices, an allegation he denies. For Patrizzi, the mounting problems could mean the ignominious end to a legend more than 30 years in the making.

Osvaldo Patrizzi began a career in watches not long after he learned to tell time. At 13, he landed a job with a watch and clock restorer in Milan and became fascinated by watch mechanics, design, and history. "The watch, for me, is not just one timepiece," he says. "It is the accumulation of experience. It is about savoir faire."

Patrizzi, 62, is prone to using such language. He has a salesman's bearing and a look to match: He's 6-foot-4, with olive skin, a toothy smile, and a head of wavy hair. He opened his Geneva auction house in 1974, determined to create a collector's market for wristwatches. Seven years later, he convened his first auction solely devoted to them.

"He is something of a cult figure," New York watch dealer Edward Faber says of Patrizzi. "From the 1970s, he built—brick by brick, stone by stone—this entire market."

Patrizzi became known for his "thematic" auctions, which showcased a particular watchmaker or period in history. He was also among the first to allow clients to follow and bid in auctions online.

As the owner of a private company, Patrizzi handled business his way, and his way served him well. He expanded Antiquorum into a multinational company with about 50 employees and offices in 10 countries. Although he portrays himself as a generous and equitable boss—a man who isn't above changing a lightbulb in a display case—even his supporters say that he can be difficult to deal with. "He has a problem with people who aren't quick," says Mark Schumacher, whom Patrizzi hired as chief operating officer in May. "He is a touchy man. Either you hate him or you love him."

From the start, those who know Patrizzi say, his corporate marriage to Artist House was doomed to fail. After he underwent an aorta replacement several years ago, Patrizzi began to prepare Antiquorum for life without him. Evan Zimmermann, the firm's New York lawyer, connected him with Artist House, a holding company that was looking to expand its portfolio. Artist House bought half of Antiquorum. Patrizzi then promised half of his stake to Zimmermann, whom he viewed as a possible successor, to persuade him to take over Antiquorum's New York office. But Patrizzi also signed a contract to remain chief executive through 2008.

Financial problems soon followed. As a publicly traded company, Artist House is subject to financial controls and regular audits, a requirement that clashed with Patrizzi's more informal—some say sloppy—management style. A full inventory of the company's watches hadn't been conducted since 2003, and accounting records weren't updated properly, according to a report prepared by PricewaterhouseCoopers on Antiquorum's behalf. And last winter, employees complained when they didn't receive customary bonuses after the fall auction season.

At a June board meeting during which directors presented a plan to name Zimmermann and an Artist House executive to leadership positions to help oversee Antiquorum's financials, Patrizzi stormed from the room and refused to vote. He bristled at the notion of working under anyone with an inferior knowledge of the watch business. The board made the changes without him. And in what Patrizzi considers a great betrayal, Zimmermann used his vote to give the Japanese a majority.

"After many years, I learned a lot about business," Patrizzi says. "What I did not learn was to protect myself from my friends."

Over the next few weeks, Patrizzi tried to consolidate his power. He fired six employees after finding a secret company blog and emails that he says prove a conspiracy against him. The blog featured a number of doctored photographs, including one of Patrizzi with his head replaced by Darth Vader's.

Artist House says it understood Patrizzi's importance to the business and had no interest in pushing him out. But after weeks of rising tension, including Patrizzi's refusal to follow a board directive to fire his longtime accountant, the board suspended him at an August 2 meeting in Geneva.

Days before the meeting, Patrizzi removed from a company safe several watches he says belong to him, including two Patek Philippe Calibre 89s, fearing he'd be unable to retrieve them later. The Calibre 89 is the most complicated pocket watch ever created (see graphic below). Artist House disputes Patrizzi's ownership of the Calibre 89s and several other watches now in his possession. A Swiss judge has ordered Patrizzi not to sell the watches—worth a total of more than $12 million—until ownership is determined.


Patrizzi was officially fired from Antiquorum in late August. In October, he lost the second round in a case challenging the June board votes. And his legal problems are getting much worse. A preliminary forensic accounting conducted by PricewaterhouseCoopers suggests that in 2006, $5 million was transferred from Antiquorum into Patrizzi's personal bank account and never returned. For his part, Patrizzi says he set aside the money to purchase watches on Antiquorum's behalf. But in late October, Antiquorum filed a civil suit in Geneva over the disputed watches and money, according to a source familiar with the situation. The company also intends to pursue criminal charges.

In the meantime, Antiquorum lumbers on without its very public face. The Wall Street Journal story on close ties between watch manufacturers and Antiquorum, while not surprising to dealers and competitors, further threatens the company's already tarnished reputation. The auction business is based on relationships and trust, observers say, and clients may be reluctant to deal with a company that's in such turmoil.

As for Artist House, which has written down most of its Antiquorum stake, its ability to pump more money into the watch business is in question. The company's stock is down 90 percent since it announced the Antiquorum investment in late 2005. And it burned through more than half of its cash in the past fiscal year.

Patrizzi now splits his time between his apartment in New York, his chalet in the French Alps, and his home in Monaco. He says that even if a court overturns his dismissal, he would probably not return to Antiquorum. But then he adds, "At the same time, I say, 'It's my son. Can I let it die?' "

For Artist House, his reappearance would certainly be unwelcome. In mid-September, a pair of the company's executives went back to Patrizzi's former apartment in Geneva. Taking a closer look at the skull on the mantel, they discovered a note tucked inside.

It read, "This is the first Japanese I killed."