Osvaldo Patrizzi Responds



Unfortunately, we have another article in which the journalist's objectives have nothing to do with presenting the truth.  For those of you who have read "Time Bomb" in the new Conde Nast publication, Portfolio, you will find that the facts are twisted in every way in my regard.  My response to the article is below, as well as a very interesting letter written by the Swiss national, Mark Schumacher, the former COO of Antiquorum; I think he really gets to the core issues.


These letters were posted on Portfolio's website, but they were removed within 24 hours of their posting.

Dear Matt:

I am writing as a result of having been alerted to your factually incorrect article that is now appearing in Portfolio.com. and the newly released Portfolio magazine.  It was forwarded to me by a friend and watch collector, who also happens to be a lawyer who knows the facts, and who was appalled at the failure of a publication like Conde Nast’s Portfolio to print anything so close to character assassination without having thoroughly checked facts with independent sources. This could not have been done, because if it had been, the “facts” presented would have been a wholly different story.


What you have presented—in a manner that seriously maligns me and my reputation—is factually incorrect. We want you and your editor in chief to review the facts below and remove the article from the online issue, with a statement that it was removed because of factual inaccuracies.   Here are the factual inaccuracies in your piece:

1. You state "forensic accounting conducted by PricewaterhouseCoopers suggests that in 2006, $5 million was transferred from Antiquorum into Patrizzi's personal bank account and never returned". 

This is factually wrong and the most serious error as relates to the damage to my reputation. I am confident you did not get this information from the accounting firm—they have not even given my attorneys their final report—so I must conclude that your source was someone from Antiquorum or Artist House, both of which are named in our lawsuits and who are far from “reliable” sources for any of the details and facts related to Antiquorum’s business under my leadership. You were given a half-truth, which, presented as you have, becomes a damaging, personal attack. As of last Friday, penal suits were filed in Switzerland against both of these parties.

In fact, the truth is just the opposite of what you have presented. The facts have been documented by an independent Swiss auditor. I am still owed money by both of these companies—7 million dollars to be exact. You have maligned me not once on this point, but twice. And since we are dealing in facts, it was not from “Antiquorum” but from the “Quorum House” account (a company 67% owned by me, and 33% by Artist House).


2. In the same paragraph, you state that Antiquorum "intends to pursue criminal charges." They have been saying this, yet have filed nothing. What IS true is that I have filed a criminal suit against them, yet this was omitted from your article, and by so doing, creates a totally different picture of the situation.  

3.  In the second paragraph, you have given the wrong acquisition date – Antiquorum’s shares were bought in January, 2006.  While far from the most serious error in this article as relates to me, it certainly does not reflect well on your fact-checking.

In the paragraph that begins, "Financial problems soon followed….." you say that a "full inventory of the company's watches hadn't been conducted since 2003." 

Absolutely UNTRUE, but again, very damaging to me in its implications. And if you knew anything about Swiss law, or had taken time to investigate further, or ask me about this “allegation,” you would easily have been able to ascertain the truth.

Swiss law regarding such matters is much stricter than those in the USA and they are particularly tough on auction houses because they consider the auction business the same as banking business. They examine every aspect of the business as it relates to the strict laws. It is not possible for an auction house in Switzerland, especially one as publicly visible as Antiquorum, to do business without maintaining and showing a current balance sheet, which requires regular inventory control. 

I will remind you that we discussed the very thorough fiscal control in 2004, in which everything was in order. 


Continued … page 1 of 2

5.  You state, “....and accounting records weren't updated properly, according to a report prepared by PricewaterhouseCoopers..." 


Here again you present this information as a “fact,” one corroborated by the accounting firm of PWC. Not only is this not true and without foundation, but I challenge you and your magazine to present any documentation from PWC that supports this statement. 

            In 2005, we undertook a review to establish “due diligence,” the results of which were accepted by the Japanese. And again, as we discussed, I agreed to quarterly audits. From the time the Japanese became partners, we underwent six audits in 18 months, each conducted by two different sources – a Swiss company chosen by Artist house, and one done by a Japanese firm. In all of these audits there were no financial improprieties.   

6. In the same paragraph, regarding "bonuses," let me remind you that we discussed this, and I explained that the Japanese that did not want to give bonuses to the employees, so I took the responsibility of giving the employees a salary increase of 35% as compensation (with the complete agreement and joy of all the employees). That is a fact.  And another “fact” that you have omitted is that I have not received a salary from Artist House for 18 months.

7. You state that Artist House's shares dropped "90 percent since it announced the Antiquorum investment in late 2005."  This is also pure fabrication and completely erroneous. If you had bothered to check with the Japanese Stock Exchange, you’d have learned that their shares started to slide many months before their interest in Antiquorum, after a stock market scandal involving a multi-billion dollar bankruptcy in Japan. I remember that they had great difficulty to find the money to invest in Antiquorum.  The 90 % loss in their shares came after Artist House was forced to liquidate 28 of the 30 companies that they were involved in, since they were all losing money!

8.Your reporting on the Calibre 89s is also factually incorrect. The independant Swiss audit report provides the facts on this. One of the Calibre 89's was purchased in 2003, and the second in mid 2004; both have documented invoices, entries in the accounting books, and bank wire transfer receipts. This is one of the points for which am filing a criminal suit against Antiquorum. These were in the balance sheets, certified by the auditors at the time, and reviewed and accepted by the previous shareholders.  The 2 timepieces were in the safes at Antiquorum in July, for the simple reason that an important Ukrainian  client was interested in purchasing one and was due to arrive in Geneva in the summer.  The other watches, which you again forgot to mention from our discussion, were being held as security for the $2,550,000 that I advanced to Antiquorum on July 24th to bridge the low cash-flow period due to delayed payment from several major clients. This money was needed to pay salaries, daily expenses, and vendors.

It is interesting that you mention the Wall Street Journal article—for which a correction was published and a letter from me correcting the errors was published—but you don't mention anything about the very positive article appearing in the Financial Times.  Here is the most compelling fact of all: In July, prior to my departure from Antiquorum, the company was a sound, healthy company (as confirmed so many times by Tsukahara). Since July it has already lost 50% of its turnover, and hence, it's lead.

I do not know who reaps the benefit of your article, since you have portrayed us all as dishonest rogues here – me, Antiquorum, and Artist House. But before closing I want to make it very clear that since I founded and headed Antiquorum it has been the #1 auction house, in the world, in the field of horology--for the last 30 years—and during that entire time there were no complaints or legal suits against us, ever. This is because it was built on intregrity, expertise, organization, and transparency.
Osvaldo Patrizzi





Dear Matthew, 

I am somehow surprised and disarmed by the way you turned your article about Antiquorum and the light in which you put the events, Antiquorum and most of all Osvaldo Patrizzi. 

Was your piece of "journalism" done to please and boost Antiquorums competitors (or obtain their favor and consequently attract their advertising budgets?) or was it written to boost only your career? Whatever, the result is far from being what a Conde Nast publication deserves and most of all, what you were probably taught in your first year at University, during your journalistic studies. Or did you miss the lecture about journalistic objectivity and unbiased fact presenting? Did you forget that personal comments must be part of the Editorial, but never become the subject of the main article? 

And don't you claim now that you only can report facts what you know: You were given full access to many of the facts of the Antiquorum – Osvaldo Patrizzi story. But you obviously chose to "pick" only the parts, which were in line with and would support your intentions. And this is sad, and totally dishonest and disrespectful to your readers. 

Mr. Patrizzi already tried to set the records straight about many of the facts on which you missed out or misrepresented. Therefore, I will limit myself to adding only some additional facts, which you did not talk about, but you perfectly knew: 

First, you are wrong to describe Ovaldo as a sluggy, machiavellisch and unmanageable personality. You missed totally out on what his personality is all about and his motivations are, which are the following: He is totally passionate about what he is doing, highly intelligent and quick thinking. He is clearly a visionary leader in his field. Without him and his thirty years of work and achievements, the market of watch auctioning would not be were it is today and even the harshest of his critics admit that he has outstanding skills and talents. You really think without anything less than that he would have been able to create what he achieved? He is the Steve Jobs of watch collecting and auctioning. And the entire watch industry knows and acknowledges it. You judge him by presenting some partial facts without, seemingly, having gotten the entire picture. And this one is much broader; He is a "one in a million person" by talent who can not be judged ONLY on the basis of some occurrences which, moreover, in your article are mainly linked to the management of the company. His is an artistic person, a creator of ideas and a visionary mind. Although totally operational and highly involved in Antiquorum, he cannot be judged on the basis of standard managerial behaviors. There are managers, accountants and lawyers to look after most of the things you claim he should have cared more for. And this is the reason he highly paid such people, amongst others Evan Zimmerman, his former business associate and US lawyer and Managing Director of Antiquorum USA Inc. But when those people who are paid to look after such matters start feeling closer to their own interests and agendas than to the one of their CEO or the company they are working for, they are not only not doing their job they were hired for, but betray the mission they have been entrusted with and betray the trust which they have been given. Or would you expect a Karl Lagerfeld to get involved in the nuts and bolts of lengthy contracts, to check the accounting and bookkeeping records, care for cash-flow management and write operational procedures?  

You also forgot to tell your readers the real story behind the story! And this is the following: What happened this year was probably planned at lengths by Evan Zimmerman together with the management of Artist House. Everybody seems to find its interest in the recent developments and each one of the parties seems to have its interest. The most important one, apart from mere greed on part of certain, seems to be the rescuing of Artist House from mere bankruptcy due to difficulties as a result of past mismanagement of the Japanese company. Why do you think the events of the summer 2007 happened between the closing of the books of Antiquorum end of March 2007 and before the general assembly of Artist House's shareholders in Tokyo. You must be pretty naïf to have believed the story that Artist House would enter into all this if its management hadn't been in quite a desperate situation in which their own salvation, and according to Japanese habits, the safeguarding of appearances and the face, was more important than the long-term development and survival of Antiquorum. 

If you had studied better the financial implications and benefits for Artist House of the events of this summer you would certainly have understood better their interest in getting control of Antiquorum and being able to consolidate its profits into the balance sheet and P & L accounts of Artist House Holdings. 

You also leave out the fact that the Geneva court recently pronounced a verdict which established clearly that all the measures taken between the date of the Shareholder and Board of Directors Meeting on June 15 in New York and Antiquorum's General Assembly of Shareholders on August 24, 2007, was illegal on many grounds; formally, legally and factually. Nothing, which the new management did since their take-over of the operational management, was done in accordance with the company's statutory requirements or the Swiss corporate law.  

Moreover, Price Waterhouse Coopers intermediate report dated September 5, 2007, of which you were given a copy established that "So far we (PwC) have not discovered any conclusive evidence that funds have been diverted".  

All what followed and is still to come was done to justify the previous actions. The more the situation got complicated for the protagonists of the events, the more obviously false and defamatory, not to say the more desperate, became the accusations of alleged facts which, according to the new Antiquorum management, justified their conduct.  

Also, you omit to mention the means used by the new Antiquorum management to take control of the situation on August 2, 2007 by entering the corporate offices and taking over the operational management of the company. Please explain to me how you justify that a 50% shareholder acts like this? Are you entitled to take such drastic measures when you do not have a majority of shares or any tangible proof of your accusations? You simply PRETEND to have the right and opt for actions to get it your way by establish a situation of forfeit facts and thus, put everybody in front of forgone conclusions!  

As we explained to you, their pretended shareholder majority is non existing as it is merely and falsely banked on the assumption that Mr. Zimmerman's 3.5% shares, which were used to give Artist House the 53.5 % shareholder majority, ALREADY have voting rights and ALREADY belong to Mr. Zimmerman. The facts are different: It is true however that a promise for the transfer of these shares was signed, but the operation has NOT been executed YET. These shares are still in escrow, they have never been endorsed or registered on the shareholder register or, what was another mandatory provision of the agreement between Zimmerman and Patrizzi, brought into the common holding company. Can you pretend to have a right to something as long as none of the legal requirements, which would have constituted and transferred these rights, have been executed properly? 

Finally, you also omit to tell your readers that the new management used any means to expel the former management and to do harm to their reputation and public and moral integrity. For instance, you did not report the facts, which occurred to me in Antiquorum's New York offices on the morning of August 2, 2007. Why didn't you describe in your article the brutality with which I was expelled by specially hired bodyguards from the NY office which led, eventually, to me arrest by officers of the NYPD which were told that "there is a restraining order against me", a restraining order which DOES NOT EXIST. This incidence is only one of the many examples which demonstrate Mr. Zimmerman's and Mr. Tsukaharas believe that "the finality justifies ALL means"! This set up, as well as the events every since was organized by the new management Antiquorum to get rid of and put discredit onto members of the former one. Luckily, the District Attorney and the Judge of the courts of New York dropped the charges against me when they understood the maliciousness and twisted objective of this whole set up and it became evident, that the NY police officers had been misled into believing an untruth. 

My conclusion about your article and final recommendation to you is the following: If you don't feel up to deal with a case which is by far more complex than you can grip and do not want to understand or are incapable of handling events which need by far a higher amount of involvement and the understanding of psychological human behavior and the power of hidden agendas, you should definitely better refrain in the future from writing half-truths about something you were, in the light of you article I have to say, obviously incapable of tackling. 

Yours sincerely, 

Mark Schumacher


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