This note is the summary of facts, in chronological order, and events which have taken place since the overthrow of Antiquorum on June 15, 2007.

Summary of Facts Presented and Update on 

Osvaldo Patrizzi’s Departure from Antiquorum SA,

and Future Prospects

 

November 30, 2007

International Press Conference

Geneva, Switzerland

 

 

The departure of Osvaldo PATRIZZI from the management of ANTIQUORUM S.A. has resulted in unending, damaging, and often contradictory media coverage. The “facts” are anything but clear.  The current management of ANTIQUORUM SA continues to make many false allegations against founder and former CEO Osvaldo PATRIZZI, including financial improprieties, mismanagement, and unethical conduct. The allegations are without factual basis, and we would like to present some documentable facts here.  In response to these  allegations, civil and criminal law suits have been filed against Antiquorum.

 

A. Pertaining to the sale of shares in ANTIQUORUM and Contractual Terms

 

The terms of the agreements stated above were blatantly violated. Certain shareholders illegally usurped control of the company, thinking that they would be able to continue to run the business successfully without the leadership, creativity, vision and reputation of Osvaldo PATRIZZI.

 

·        The shares of ANTIQUORUM S.A. were sold in December 2005 to ARTIST HOUSE HOLDINGS (hereafter ARTIST HOUSE), a Japanese corporation listed on the stock exchange.

 

·        The contractual objective was for ARTIST HOUSE to become 50% owner of ANTIQUORUM S.A., the other half of the shares were to go to Osvaldo PATRIZZI who was moreover to keep a majority vote due to his position as President of the Board of Directors, which gave him an additional vote.

 

• Additionally it was contractually agreed that ANTIQUORUM’S own inventory would remain the property of the selling shareholders and Osvaldo Patrizzi.

 

 

 

 

B. Other Facts Pertaining To The Situation:

 

1. Although having delivered to ARTIST HOUSE all of the shares Osvaldo PATRIZZI had sold to them, Osvaldo PATRIZZI was only partially paid. ARTIST HOUSE is now using the shares to control ANTIQUORUM S.A., substantiating possession of all of the shares, while refusing to pay the balance owed on them, an amount totaling USD 3.76 million dollars. ARTIST HOUSE persists in refusing to pay for them, disputing the fact that all of the shares were delivered. Yet if this is the case, how did ARTIST HOUSE have sufficient shares to gain control ANTIQUORUM SA. On the other hand, if he did not pay for them, did he technically own the shares and have the power to do so?   

 

2. Osvaldo PATRIZZI’S control of Antiquorum was taken from him by actions voted on  at an illegal shareholders meeting on June 15, 2007, convened in violation of and contrary to the articles of incorporation, and the law. This has been noted by the Geneva justice system.  

 

3. At a Board of Directors meeting held on August 2, 2007, the new, illegally elected members of the Board were also not registered with The Trade Register of Geneva. Therefore, the Board had no legal authority to represent the company or to make any decisions such as the dismissal of Osvaldo PATRIZZI and the firing of six of the senior members of Osvaldo Patrizzi’s management team: Mark SCHUMACHER, COO; Leo VERHOEVEN, CFO; Michel COHENDET, Managing Director; Alex COHENDET and two daughters of Osvaldo PATRIZZI.

Following this upheaval, ARTIST HOUSE seized control over the operational management of ANTIQUORUM Group, added members to the Board who would ally themselves with ARTIST HOUSE to outvote any opposition from the remaining Board members.

A new “General Meeting” was called by the new—and self-elected—President on August 24, 2007, to “ratify” the decisions of the prior meeting in order to establish the semblance of legal proceedings. At this meeting, ARTIST HOUSE appeared to have the majority necessary to carry the decisions, but the legitimacy of the votes is in question.

 

4. The financial assets of ARTIST HOUSE have been deteriorating and one must ask if the purpose behind the complete disregard of the contractual terms by ARTIST HOUSE to gain control was done in an attempt to use the assets of ANTIQUORUM S.A. to mitigate its own financial position among its stockholders, not realizing how complex the business was, and how significant Osvaldo PATRIZZI’s role was in its continuing success. 

Since August, the primary corporate strategy appears to have been to discredit Osvaldo PATRIZZI. One must ask if this was perhaps a reaction to discovering how important Osvaldo PATRIZZI was to ANTIQUORUM SA and an attempt to discredit him in a mis-guided notion that this would cause clients to realize that they were justified in their actions to take control. They have tried to portray him as a man without integrity, a man guilty of financial mismanagement and embezzlement, a man of greed who gives no thought to his clients. They have done this through deliberate omission and deletion of facts, deliberate distortion and misrepresentation of facts, and by blatant lying, while all the while, under their leadership the company’s performance has rapidly declined—a company that only a few months prior had been a profitable, highly respected, and exemplary corporate success story; a company that for the past 30 years, since its founding by Osvaldo PATRIZZI, has been the #1 auction house, in the world, in the field of horology—and during which time there were no complaints or legal suits, ever. Normally, such success, over such a period of time, is a reflection of a well-run company built on intregrity, expertise, organization, and transparency.

Facts pertaining to the many untruthful allegations, facts that will exonerate Osvaldo PATRIZZI, are included in legal proceedings now underway. Osvaldo PATRIZZI will be asking the Geneva court for a ruling that would make null and void all of the decisions reached at the June 15, 2007 shareholders’ meeting.

 

·        Numerous and varied accusations have been made, going back to days prior to the exhaustive Due Diligence process undertaken by the Board of Directors of ARTIST HOUSE which resulted in full approval, in 2005, to proceed with purchasing the shares in the company.

 

5. Other charges relate to inventory, which are without foundation a completely disregard what was agreed to in the original contractual agreements.

 

6. Some of the allegations pertain to “transfers of funds” or “pseudo withdrawals” mentioned in a report conducted by PricewaterhouseCoopers. Despite repeated requests by Osvaldo PATRIZZI and his attorneys and accountants, copies of the findings were never provided to Osvaldo Patrizzi. However, what has become clear is that the current management deliberately manipulated the findings by removing and withholding important documents from the files pertaining to several important financial transactions. By so doing they led this respected accounting firm to erroneous conclusions, contrary to the truth. Had they been given all of the documents, the findings would have shown no financial impropriety.

            A detailed report, accompanied by supporting documents, was sent to the current management of ANTIQUORUM S.A., with a request that they be provided to the auditors in an effort to make sure the auditors had all of the documents necessary to conduct a thorough audit. The request was denied.  

By withholding material financial documents, the current management of ANTIQUORUM S.A. has clearly demonstrated that its goal was to manipulate the findings of PWC in order to obtain a negative report that would further undermine the credibility of the old Board and, in particular, Osvaldo PATRIZZI, and thereby justify their actions in taking control.

In response to the charges made by the new management of the company, and in view of their opposition to any form of dialogue that would have clarified any questionable issues, Osvaldo PATRIZZI retained another firm to perform an independent audit to assure his clients and colleagues that the alleged findings of PWC are invalid. This audit, in direct contradiction to the rumored conclusions of PWC, show no financial improprieties. 

 

These reprehensible acts are most certainly a response to the increasing pressure being faced by the current management of ANTIQUORUM SA to justify their acts to the Board of ARTIST HOUSE and its shareholders, especially in light of the very poor performance since the management change, which have fallen far short of expectations following loss of customer confidence related to the departure of Osvaldo PATRIZZI.

 

It is also significant to note that the actions taken to gain control of the management of ANTIQUORUM S.A. occurred between the end of May 2007 (the statutory closing date of the annual financial statements of ARTIST HOUSE), and the end of August 2007 (the date of statutory General Shareholders meeting of ARTIST HOUSE). This may have been an attempt to bolster shareholder confidence since the financial situation of ARTIST HOUSE has continued to decline and its management has been forced to liquidate or put into bankruptcy several companies under their control between 2006 and 2007.

 

A criminal complaint and two civil claims will be coming before the Geneva courts —a criminal complaint for falsification of documents and knowingly giving false testimony related to the facts; and civil claims requesting revocation of all actions and decisions occurring at the illegal shareholders’ meetings of June 15 and August 24, 2007.

 

Moreover, Osvaldo PATRIZZI is filing a claim in the courts for monies due him from ANTIQUORUM SA and ARTIST HOUSE since entering into the agreement with them. These monies include wages that have not been paid to him for 20 months, important loans he made personally to ANTIQUORUM., and monies owed from the profit-sharing plan per his contract with ARTIST HOUSE.

 

A claim will also be filed in the United States against the director of ANTIQUORUM, USA Inc, for having ordered and orchestrated the expulsion and wrongful arrest on August 2, 2007, of Mark SCHUMACHER, an officer of the company at the time.

 

In conclusion, ANTIQUORUM S.A. has managed in just a few months to destroy its base of buyers and to see a decline of 40% in sales versus the same period a year ago. The future looks even bleaker because of lack of confidence among prospective consignors resulting from concern about the financial and management stability of the company.

 

With regard the professional prospects for Mr Osvaldo PATRIZZI, he is working on a new and revolutionary concept that will provide an even better approach to the auction arena, one that will respond even more effectively to the expectations and needs of collectors and provide a unique method for monitoring market trends. More details will be forthcoming at a later date.

 

For all information and/or supplementary documentation please contact:

Mark SCHUMACHER, +41-76-200 18 05, mschumacher60@bluewin.ch

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