Hollow Hype

ELIZABETH NELSON
Welcome to Episode 12 of Hollow Hype. In Episode 11, the Southtown project was in bankruptcy. Heidi claimed that the empty block was worth $61.3 million.

[Sound, papers shuffling]

I’ve spent hours looking at deeds and mortgage papers related to the properties owned and managed by Heidi and Marge. The same addresses appear on multiple documents, as debts were juggled, combined, and transferred between different banks. Marge would purchase a property and take out a mortgage with one bank. Six months later, Heidi would refinance the property with another bank. Debt amounts grew, as they arranged for future advances on mortgages.

It’s complicated. And it’s unclear who controlled what.

For years, Heidi and Marge presented themselves as co-founders and co-owners of a real estate empire.

In May 2020, Heidi participated in an online seminar for the Green Home Institute. She explained their company

[Recorded presentation 2020]

BRETT LITTLE
All right, well, I want to uh welcome our speaker here, Heidi Poscher, she is 4M’s lead founder and focuses on strategy and business development. She is a serial entrepreneur, deal maker, and developer in the Ann Arbor area. No matter what project she is working on, she brings forth a certain zest and gusto to the table, elevating the whole team in the process. So with that, Heidi, I welcome you and I ask you to take it away.

HEIDI:
Great. Thanks very much, Brett. I'm here today to talk about ideas around housing as a service.

So just a little bit of history about our company. We're real estate developers. We have a growing portfolio of properties that we've developed and then managed. So when we started taking a look at this, we did kind of come at it from a traditional rental situation or perspective. Um, but over time, we feel like the idea of rental is changing.

We always like to talk at our company about how do, um, how does one on one, one plus one equal three or four. And so what we'd like to tout is that when you start to add up all these benefits, there's exponential value associated.

[MUSIC]

ELIZABETH NELSON:
My name is Elizabeth Nelson. From 2018 to 2022, I served on Ann Arbor City Council. That experience taught me a lot. Mostly, I learned: people will say just about anything if they think you’ll believe it. This is HOLLOW HYPE.

In June 2021, Heidi and Marge announced upcoming plans to convert a former grocery store into the Venue restaurant and event space.

[2021 video presentation]

HEIDI:
I'm Heidi Poscher

MARGE POSCHER:
and I'm Margaret Poscher and we are the owners of Prentice 4M, a real estate development company here in Ann Arbor.
We've been developing residential real estate in Lower Burns Park for nearly a decade. Today we are really excited to announce our latest project, which is the redevelopment of this neighborhood gem, Lucky's Market.

HEIDI:
Lucky's has always been the hub of this 15 minute neighborhood.
And when it closed unexpectedly 18 months ago, it really left us looking for a place to gather.

MARGE POSCHER:
So what we've decided to do is create a new gathering place.

ELIZABETH NELSON:
In 2023, the architect of Southtown referred to Heidi and Marge as the owners.

[2023 recorded meeting]

ELLIE ABRONS:
This is a continued public hearing for 1601 South State Street this is the South Town rezoning site plan and Street vacation a project with three petitions to redevelop the block bounded by South State Street, White Street, Henry Street and Stimson Street

ADAM SMITH:
I'm Adam Smith I'm the director of design for Synecdoche here in Ann Arbor I have with us our studio director Sydney Philippus and also the owners of the project Marge and Heidi Poscher are here as well

ELIZABETH NELSON:
At some point after July 2022, Marge became the sole member of Prentice Partners and Southtown LLC, signing all the documents for both companies. Since the death of Marge, Heidi now controls both.

[MUSIC]

When Marge died, Heidi provided the probate court with an inventory of her assets including her interests in multiple LLC’s. According to Heidi, Marge had 100% membership interest in Southtown, and 99% interest in Prentice Partners of Ann Arbor, the Wyoming LLC that Heidi herself had established in 2016.

Heidi reported that Marge held a 99% interest in Circa 1919, the LLC for Venue and a 99% interest in 4th Purpose Energy, a company that Heidi claimed to lead as an energy consultant.

One part of the inventory is particularly puzzling: Heidi reported that Marge held an 81% interest in AHFLP. An LLC with the same name was registered by Heidi twenty years ago, in Ohio. Twenty years ago, Heidi was actively laundering funds through the broadband company, Sequelle.

The acronym AHFLP stands for Andrew Hill Family Limited Partnership. Andrew Hill isn’t the name of a person, it’s the name of a street, where Heidi lived with her former wife, Betsy. In 2005, their home on Andrew Hill Place was conveniently located: less than a mile from the registered offices of Sequelle Systems and just two miles from where Betsy worked at a local high school in Worthington, Ohio.

Heidi and Betsy lived on Andrew Hill Place for just a few years, then sold the property.

In 2016, Heidi incorporated a new AHFLP LLC in Michigan. This LLC does not appear to own any of the properties or businesses managed by Heidi and Marge. In December 2020, the AHFLP LLC received over $6 million in federal loans under a program for economic stimulus in response to COVID.

What is it?

Why would Heidi incorporate an LLC in the name of a home that she shared with an ex-wife? Why did Marge have an 81% share in this particular LLC? Did Marge know what it was, what AHFLP stood for?

[Sound, papers shuffling]

Ten months before she died, Marge recorded a debt between Prentice Partners and Southtown LLC – Marge signed for both Southtown and Prentice. According to documents filed with the county Southtown owed Prentice $8.5 million.

This debt was discussed in a bankruptcy hearing for Southtown.

[2026 Court hearing]

LAWYER:
The reason this bankruptcy was filed is that there are three major liens against this property. And I'll get into the property more in a minute. The first mortgage lien is held by CNB and they're about 17 million, give or take, is the claim. There's a second lien claimed to be held by an entity called Brownstone, for about eight million, give or take. And then there is a third lien for another eight and a half million in favor of Prentice Partners of Ann Arbor, which is an affiliate of the debtor, meaning that that entity was also owned by Margaret Poscher.

ELIZABETH NELSON:
The recorded documents for that third lien are not a regular mortgage. They include no terms for repayment and no percentage of interest. The debt was recorded as a promissory note, simply declaring that Prentice had loaned Southtown $8.5 million.

RALPH MCKEE:
If there's just a promissory note and no mortgage, it's not a secured claim. You have to file a mortgage or you have to get the appropriate uniform commercial code documents to secure your claim. If there isn't that, it's not a secured claim. So it can't be on the same level as the actual mortgages or the construction lien claimants. It's underneath them.

ELIZABETH NELSON:
In bankruptcy, there is a big difference between what counts as actual debt, and what’s considered an infusion of cash into a business. Debt is paid back. An infusion of cash or equity includes the risk that it might not be paid back.

RALPH MCKEE:
If you properly documented it as debt, you could argue that it was debt. These disputes are very common in this type of case, particularly when, when an entity is running into cash flow problems. And there, there are serious solvency issues, which there were at some point in the run up to the bankruptcy. As soon as the cash flow problems start the competing creditors will always contend that that's not really debt, that's really an equity infusion.

ELIZABETH NELSON:
Heidi wanted Prentice to count as one of Southtown’s biggest creditors. When Southtown’s debts were paid off, this $8.5 million would then come right back to Heidi, via Prentice.

RALPH MCKEE:
If it was really debt, that would be cashed out to the tune of however much it was. If it was really 8.5 million, that would be paid out in cash.

ELIZABETH NELSON:
Heidi’s own lawyer acknowledged that this was not a legitimate debt.

RALPH MCKEE:
Southtown and Prentice have been unable to provide evidence that this was in fact a loan rather than an equity infusion by Prentice into Southtown. Remember, this is the debtor's lawyer saying this. And so the compromise being sought is that the Prentice mortgage interest be converted to equity and the Margaret Poscher estate would hold Prentice's 5% membership interest in the new company coming out of bankruptcy.

ELIZABETH NELSON:
That membership interest is worth something, assuming that Southtown eventually gets built.

[MUSIC]

In the months since Southtown filed for bankruptcy, elaborate plans have been submitted to the bankruptcy court, listing various investors, future partners, and shared ownership interests.

Projected revenue for Southtown is very high. Estimates assume extremely high rents, much higher than anything else in the neighborhood.

Heidi predicts that the project will generate additional revenue from the technology of a microgrid and fuel cells. In 2024, the city of Ann Arbor approved Heidi’s plan to use this technology, even as the City Planning Commission admitted that they didn’t understand it. The City’s Sustainability and Innovations Director, Missy Stults, also endorsed the technology, telling City Council that even if it wasn’t sustainable, it was at least innovative. In 2025, architect Lisa Sauve told Mlive that the technology would not work.

In 2026, the bankruptcy court judge wondered how the technology would translate into revenue for Southtown. Heidi offered extensive explanation.

[2026 court hearing]

JUDGE:
Ok, are we talking ten dollars, ten thousand dollars, ten million dollars?

LAWYER:
Millions. Yeah.
Heidi can speak to it. I don't have the projection open in front of me. But yes, it's millions.

HEIDI:
So with a carbon credit, um there are a number of different dynamics that affect the price. One thing to keep in mind is that carbon credits, the value of them is market-based. So as time goes on and the climate crisis continues to become more severe, the markets will continue to evolve. That will replace incentives, so the carrots, with sticks, penalties.

We will be able to demonstrate somewhere between 12,000 metric tons and 15,000 metric tons of greenhouse gas avoided every year. Starting out, each metric ton will be worth somewhere around a hundred dollars per metric ton. But as time goes on and those penalties become more and more of the solution of how we reduce greenhouse gas and the effects of climate change, the higher the value of those will go.

JUDGE:
Okay, but I I hear you and you're so knowledgeable on this compared to the court's knowledge on this. So I apologize if this question seems silly But are we there yet policy wise? Is this a real thing now or is this a business that you….is is this an aspect of the debtor that you expect will take hold and become profitable in years to come?

HEIDI:
So if you're speaking about the marketplace and if those, if the $100 is achievable now, the answer is yes.
There are markets available now that you can take a carbon credit to.

ELIZABETH NELSON:
Heidi’s performance in bankruptcy court was similar to her performance at City Hall, with the Planning Commission, Missy Stults, and City Council members. She projected confidence about the technology, based on markets that “continue to evolve.“ Heidi has apparently persuaded investors that the value of carbon credits will explode in the future.

At least one investor was initially on board and then backed out. In July, it was explained in bankruptcy court.

[2026 court hearing]

JUDGE:
Is the equity player behind door number one the same as the exit financier behind door number two?

LAWYER:
Nope. Two different parties.

JUDGE:
Two different. And the court recalls seeing a term sheet before, the one with a whole lot of abbreviations the court had to struggle with. Remember that term sheet?

LAWYER
The Whitehawk term sheet.
Yeah, Whitehawk has walked away.

JUDGE:
Whitehawk walked away?

LAWYER:
Yes. After due diligence, Whitehawk walked away.

We're still negotiating, Your Honor. We would like it to be a hundred million, but we don't know that we're gonna get there. So we're negotiating for the highest number the estate is that it can.

Okay, so it it's more than a million, I guess is all I take away.

ELIZABETH NELSON:
By August, more investors were identified and named in a plan. This plan would be reviewed by the probate court, on behalf of Marge’s estate. In discussion of next steps at probate court, Heidi made the remarkable claim that multiple financiers were likely to offer bids, competing for the chance to fund the project.

[2026 court hearing]

JUDGE:
But from last week we learned that that's subject to perhaps some competitive bidding in the probate court?

HEIDI:
That's correct.

JUDGE:
And who's doing the bidding, do we know?

HEIDI:
The third party that's coming in. I don't... There are actually a number of different financiers that are interested in the project. So ostensibly they would be the ones coming forward with uh… but I don't know that I don't know that I have the ability to release those names. It that's okay.

JUDGE:
Okay. Thank you.

HEIDI:
Yeah, of course.

[MUSIC]

ELIZABETH NELSON:
If investors come forward with as much as Heidi expects, the Southtown bankruptcy will be resolved in a way that pays off all debts, and creates a new company moving forward.
The bankruptcy court now has two potential plans. One plan includes a payout of cash to Heidi, through Marge’s estate. The other plan gives Heidi a larger share in the future development, also through Marge’s estate.

Heidi is in the driver’s seat.

RALPH MCKEE:
So she's in total control of the bankruptcy estate and of the entities that are going to receive equity in the new company if it exits bankruptcy. There's Blue Phoenix. That's an affiliate of Heidi. There's Prentice, which gets 5%. That also will be in Heidi's control.
And those are the entities that come out with equity in the new company.

In exit alternative A, Heidi gets 13 million dollars cash on the effective date and she gets 27% of the equity going forward of the project. In exit B, she doesn't get any cash but she does get 59% plus those other percentages. So she's got effectively a very large percentage of the Southtown new company equity going forward whatever that's worth.

End of music

ELIZABETH NELSON:
At an August hearing, Heidi helped explain arrangements to the bankruptcy judge.

[2026 court hearing]

LAWYER:
Yeah, I think there's a purchase price for the equity from the estate, so that money would stay in the estate and then separately there's an investment.

[cross talk from Heidi]

Yeah, the estate gets to keep that money, the multiples, and then they would also be making a fifty-four million dollar investment.

JUDGE:
Fifty-four million investment, so that's under…

HEIDI
…forty one million.
But I think actually, Your Honor, if I may.

JUDGE:
Yes.

HEIDI:
The the amount that's going to the estate for the equity, the amount that's going to take the money out of… the remainder of the project out of Chapter 11 and then the amount of money that's going to the project. They just break down how that $54 million is going to be spent.

JUDGE
But they didn't tell me how much of it is that multiple of seven figure.

HEIDI:
I believe it is in that letter and it's thirteen million dollars.

JUDGE:
It's how much?

HEIDI:
13 million.

JUDGE:
13… Where is it? I read this twice.

HEIDI:
I can just tell you right now that number one is thirteen million.

JUDGE:
Thirteen? Okay.

ELIZABETH NELSON
Bankruptcy documents explain Heidi’s preference for the plan that would pay $13 million.

Through Marge’s estate, that money will go to Heidi.

If Marge were still alive, she would have received that $13 million, based on her ownership interest in Southtown.

[MUSIC]

When Marge died, she left a suicide note, with explanation that “We are out of money. This was the only solution.” She referred to insurance policies that would pay out to Heidi. Marge calculated that Heidi might receive as much as $4.5 million.

This amount wasn’t anywhere close to addressing the scale of debt that Heidi and Marge faced. It was a band-aid, at best, delaying the inevitable.

In a typed up note, Marge proposed that Heidi use the insurance proceeds to pay off immediate debt related to Venue. She referred to a line of credit they expected to get through the AHFLP LLC. Marge directed Heidi to find a co-developer for Southtown, but “let the rest of it go.”

Why did Marge think that $4.5 million would make such a difference? Why did she believe that these insurance proceeds were the “only solution”?

When she shared the tragic news of Marge’s death, Heidi pretended to have no idea what motivated Marge. Heidi didn’t tell any of Marge’s friends about the suicide note. Heidi claimed that she would probably never understand the choice that Marge had made.

Thank you for listening. In Episode 13, the claims filed against Marge’s estate reveal more about their lifestyle. City officials weren’t the only elected leaders