As far as I know there is no minimum bid..... There is a requirement to post $750,000 prior to bidding. As I understand this requirement, it is there to screen out folks from bidding that don't have a minimum of resources available..... sort of a serious bidders only requirement in a tangible way.
To address the preferred bidder clause:
There are two arguments I can see aside from the increased opportunity for collusion. One for and one against.
The Against argument works like this.
The preferred bidder has the option of seeing the high bid and choosing to match it and thus win the auction.
Since preparing a bid for an auction like this one one has real expenses associated with it, a bidder may well conclude that what would have been a winning bid may well be matched by the Preferred Bidder. Thus making all of the expense a wasted effort when it otherwise would not have been.
The net result is a higher level of uncertainty in a process that is already uncertain. That may cause an otherwise serious bidder to not bid at all, with the resulting lessening of price pressure on the bid process. that is a lower winning bid.
The For argument works like this.
If a company has decided that they desire this property and recognizing the Preferred Bidder clause, they might increase their bid price to make it unattractive to the Preferred Bidder to match. This would result in a bid that is higher than they might have made without the Preferred Bidder clause.
Of course this all appears to be moot. A little research indicates that the preferred bidder may not have significant resources available to it, so it appears that if the price for the properties gets much over the fire sale level, the Preferred Bidder won't be able to match anyway.
