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Patricia Wilson still has vivid memories of the morning in April,1975, when she arrived for work at the Potter Instrument Co. inMelville: The doors were padlocked. While it was not a shock - she knew the 28-year-old maker of computer equipment had been in a tailspin for several years - it was a deep disappointment.
"The sheriff put the lock on the door," said Wilson, who was then a secretary. "We couldn't get into the building. It was devastating."
In the weeks before the bankruptcy, Wilson and some of the other 1,500 Potter employees had worked without pay to stave off the shutdown. Trouble began in 1971 when International Business Machines Corp. reduced its computer-leasing charges by 25 percent, undercutting smaller companies like Potter that made commercial computer peripherals - machines such as printers. The next year, Potter posted a $13.1 million loss.
In 1975, a major lender, the First National Bank of Boston, refused to release payments of $1 million to $2 million a month to Potter. Both moves crushed the company, according to Jack Potter, a Locust Valley engineer who started the company in 1947.
But some engineers at Potter's small military products division, which employed only 100 people and was headed by Richard Pandolfi of Smithtown, refused to call it quits. Potter, Pandolfi and others tried to persuade outsiders to buy the company. While Litton Industries Inc. of Beverly Hills, Calif., and E-Systems Inc. of Dallas, among others, expressed interest, they said they did not have the cash.
But Jan Stenbeck, then a 31-year-old Swedish immigrant whose family controlled large financial holdings overseas, did.
Stenbeck, then a financial strategist at...