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."