For a few short hours Monday, it looked like financially strapped Sengstacke Enterprises, owner of the Chicago Defender and three other African-American newspapers, had found salvation.
For more than four years, its future has been in doubt as Sengstacke family members struggled with the company’s fate after its longtime leader, John Sengstacke, died.
On Monday morning, its board of directors voted unanimously to be acquired by Real Times Inc., a Chicago firm headed by Thomas Picou, a member of the Sengstacke family, a former executive of its businesses and a current consultant to its newspaper operations.
But the board attached several undisclosed contingencies, and by late afternoon, Picou had rejected them, throwing the potential deal into serious doubt.
“I turned down the contingencies,” he said Monday afternoon. “I found them a little unreasonable.”
If a deal can be salvaged swiftly, it would be submitted for approval Wednesday to Cook County Circuit Court Judge Bernetta Bush, who is overseeing the company’s probate case. The future of the family-owned business has been in doubt due to an estate tax bill in the neighborhood of $3 million, which has attracted bidders for the firm.
Terms of the proposed deal were not disclosed Monday, but Picou said the purchase price was in excess of the $8 million price tag attached to his bid in an earlier report.
Picou, 58, formerly president of Sengstacke Enterprises, declined to say if he had partners, or to identify backers. But sources close to the deal had said the Sengstacke board was satisfied that Picou “has the financial ability to perform.”
The Sengstacke board had been negotiating exclusively with Real Times.
If this deal evaporates, the board will resume talks with other parties who have expressed interest, said James Lowry, court-appointed trustee for the Sengstacke estate, which is the major shareholder of the newspaper chain that also publishes the Michigan Chronicle, the New Pittsburgh Courier and the Tri-State Defender in Memphis.
This deal could have put a close to a protracted, bitter battle over the paper’s future, which was thrown into question in 1997 with the death of John Sengstacke, publisher and majority owner. He was a nephew of Robert Abbott, who founded the Defender in 1905.
Sengstacke willed a controlling 70 percent interest in the company in trust to his son Robert’s six children. And he left Robert 9 percent of the company. And, according to John Sengstacke’s granddaughter Myiti Sengstacke, he made a deathbed request that the newspapers stay in the family. Picou is a nephew of John Sengstacke.
She and her siblings have resisted earlier outside bids for the company, which ranged from $10 million to $15 million.
In the Picou deal, Robert would have retained an ownership interest, swapping his Sengstacke shares for shares in Real Times, Picou said.
As well, Robert and Myiti would have had the option to be part of the new organization, he said.
And Picou had plans to make changes in the appearance and substance of the Chicago Defender, which is just a shadow of the muscular, crusading newspaper it was in its heyday.
“If you look at the product, it’s not good enough,” he said.
At one time, the Defender was the most influential black newspaper in the country. It became home to black writers overlooked by the white press, including Langston Hughes and W.E.B. DuBois.
