The Aristophil case: the first legal twists

The sale of famous manuscripts in the Aristophil financial scandal continues to make waves, this time in terms of legality. How will the 18,000 subscribers be compensated? Several avenues for analysis have come to light following the first court decisions.


Another look at the Aristophil case

The case began when a financial package was put in place by Aristophil, offering investments in books and old manuscripts. The insolvency proceedings revealed an operation reminiscent of the Ponzi scheme, in which new investors generate returns for old investors and sustain the illusion of the operation’s high profitability. The financial operation was explained by Laurent Michel, our finance loss adjuster, in his article The Aristophil bubble: a controversial investment scheme.

On 16 February 2015, Aristophil went into receivership, followed by compulsory liquidation in August. At the end of 2017, the manuscript collection was auctioned off during a first public sale.


A complicated recourse process for subscribers

More than 18,000 subscribers had invested through full or joint ownership contracts for a total of approximately €850 million. The company collected more than 130,000 manuscripts, making it the largest collection in the world.

The subscribers would not have retained custody since the scheme primarily involved shares as financial investments. Therefore, taking out specific insurance for this type of asset would not have seemed obvious.

In addition, the value of the assets offered through these contracts is thought to have been overestimated, both in terms of the purchase price and the resale price, promising savers unrealistic returns that were not in line with market pricing.

What’s more, some assets were acquired by the company in its own name.


The first court decisions

This first twist in the case occurred following subpoenas issued by the solicitor representing a group of victims: two financial institutions are also being prosecuted by the High Court of Paris.

After eight months of drawing up inventories, a first auction took place at the end of last year to begin the compulsory liquidation of the collected assets.

The court-appointed auctioneer responsible for the coordination of sales estimates that it will take at least six years and more than 300 sessions for all of the assets to be auctioned off. And it is more than likely that savers will not recoup their initial investments following these sales as a result of artificial market fluctuations in recent years.

We might also wonder what role the State will play in these sales. Will it exercise its right of pre-emption at the public auctions or classify some manuscripts as national treasures at the last minute? The withdrawal of two key lots just before the first sale was not entirely in tune with the needs of the victims.


Diane MACCURY – Specie loss adjuster 

Find out more about her area of expertise