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The incoming call on David Nygaard’s cell is one of the few he wants to take these days: his wife, calling about company at home tonight for Friday pizza. “I can even pay for the pizza!” he deadpans, draining the last of his iced tea as we sit at a terra-cotta table outside Nygaard Fine Jewelry in a Chesapeake, Virginia mall. “We sold a carat FVS2 emerald today.” Later, he tells me he was thinking of how narrowly he could boast of having a house to serve the pizza. Wachovia, which holds his business and personal loans, put his Dutch Colonial up for auction yesterday. There were no bids. So while packing at home continues for his family of eight, Nygaard knows where they’re sleeping tonight. “All in all, a good day,” he tells me, a little less deadpan. “Fed my kids this morning.”

Inside, Nygaard’s father, a retired Navy captain helping both financially and at the shop, is preparing to close up well before five. The 700 square foot shop, owned by Nygaard’s wife and father, is what’s left of a seven door, 38 employee mom and pop that some saw as an exemplar: heavily branded, accentuating private label fine cuts, and a luxurious retail experience at a strip mall level. And Nygaard, through interviews, panel appearances, industry position, and by example, had been a public figure. It all imploded on June 26, when Wachovia called Nygaard’s loans and took possession of his inventory. He closed his doors five days later.

“Screening calls may be the hardest thing for me to get used to,” Nygaard says in somber tones as he surveys neighbors and foot traffic in this very busy part of coastal Virginia. He’s a very public figure here, and his David Nygaard Fine Jewelers a personality driven brand that for a decade has generated millions in annual sales on the strength of his good name and community presence. He’s been equally front and center, even upbeat, about his failure, but the bulk of callers now are out-of-state creditors, and he has little to offer them. “I owe just about everybody,” Nygaard says, such as debts to vendors, suppliers, and former employees that he ballparks in the $350,000 range.

That figure seems small, considering the number of vendors (some of whom have received subpoenas regarding their trade with Nygaard) currently clamoring for goods or money, principally loose diamonds on memo. “The problem,” Nygaard amplifies, “is that while my vendors own goods on memo to me, under UCC [Uniform Commercial Code] regs, that ownership does not automatically secure their interest on them. Mailing me a diamond with terms does not keep it safe from liens on me—or anyone for that matter. That’s just consignment, or a form of exculpated interest. It’s up to them to protect their inventory by filing searchable UCC documents informing any bank holding the lien on their clients’ property that, while that it may be a blanket lien, it does not apply to those specific goods. Modest UCC paperwork and fees, but unfortunately, not the way our handshake industry works.”

He also owes former employees their last two weeks of pay, which he’d promised in good faith toward the end of June, knowing the end was near. The bank holding those funds, however, froze his assets the day after Wachovia closed him. “That’s the bad part of being a public figure,” Nygaard says. “I did eight interviews when our doors closed—enough for the bank handling our day-to-day finances to learn about it and freeze us. Otherwise, I would have at least been able to make payroll. The money’s all there.”

So are the memo goods, which sit in the safe of his flagship store in Virginia Beach alongside Nygaard’s owned inventory. He estimates total cost of the goods at roughly $800,000, of which 35 percent by value are loose memo. Their replacement value, however, given the soaring costs of diamonds and precious metals, is north of $1 million. “What makes it particularly bad for the vendors,” Nygaard sympathizes, “is they’re not just out the dollar value of their goods, but their ability to borrow against the replacement value.”

How then can he owe so little? “That’s the silver lining, I guess.” A private label branding pioneer who has long argued for “owning your merchandise, at the right price,” Nygaard owned or had created the bulk of the goods in that safe.