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It was the early 20th century, and lynch mobs were rampant throughout the South. Robert Sengstacke Abbott, publisher of the Chicago Defender, was using his newspaper to spread reports of a somewhat better life up North.
His great-niece, Myiti Sengstacke, remembers hearing these stories of how her family used the newspaper to keep the black community informed over the course of the publication’s 93 years. During that time the newspaper evolved into a pivotal voice in the black community, counting W.E.B. DuBois, Langston Hughes and Gwendolyn Brooks among its early writers.
But today, the Chicago Defender and three other weekly publications under the Sengstacke Enterprise umbrella-the Tri-State Defender, the New Pittsburgh Courier and the Michigan Chronicle-are under siege following the death of her grandfather and company chairman-John Sengstacke. The IRS has levied nearly $4 million in estate taxes since Sengstacke’s death in 1997. Now his granddaughter is seeking to become one of the youngest newspaper publishers in the country while looking for funding to pay the tax bill without selling the papers.
“When he was on his death bed, I promised him that I would keep these papers alive and keep them going,” she says. “His intention was never for the papers to be sold.”
But because there was no explicit succession plan, the company was left with no clear direction following his death. What is known is that Sengstacke instructed Northern Trust, the trustee of his estate, to provide for his beneficiaries-six grandchildren-of whom Myiti is the oldest. To that end the bank planned to sell the estate, valued at $10-$12 million, but in keeping with her grandfather’s last wish to keep the newspapers in the family, Myiti dismissed the trust and is now looking for financial alternatives to pay the tax debt.
“The loss of the grandfather, and the absence of a documented succession plan has required all the interested parties to evaluate what’s best for them,” says Sengstacke’s attorney, Elias Matsakis of McBride, Baker & Cole in Chicago. “And that’s not an easy process.”
The chain’s board members, which includes two appointees from Northern Trust, will vote on an organizational plan, which will include looking for financial investors. Among the potential investors is be 100s CEO Don Barden, of the Detroit-based Barden Companies Inc. He has proposed a debt-financing recapitalization of $10 million, which would give him a stake in the business. A stipulation of any deal, says the attorney, would include Myiti Sengstacke becoming publisher of the newspaper chain and that it would remain Sengstacke Enterprises.
“We’re looking to work very closely with an investor, in terms of a partnership,” she says. But at 27, is Myiti Sengstacke ready to handle a job that entails overseeing all publishing duties for four weekly newspapers with 300 employees? She says yes. Before her grandfather’s death, she studied business marketing and entrepreneurship at Hampton University in Virginia. She left school two credits shy of graduation when her grandfather became ill. She is currently the youngest person and the only woman on the chain’s five-member board