To have three bids for stalking horse is pretty solid - and it doesn't mean that there would only be three bidders at auction. The consensus in the world of bankruptcy is that auctions go better if there is a solid foundation upon which competing bids can be started, the auction itself is more efficient and yields better outcomes for the estate. So, where possible, a 'best starting offer' is chosen. There are a lot of potential bidders who purposely do not want to be a stalking horse - because you tip your hand a bit - they'd prefer to just show up an auction and overbid. Typically the SH will be a smaller player - the inducement to serve as SH is a 'breakup fee' - if you are the SH and you don't win at auction - you get a fee for providing the estate with a starting bid - it's usually a few % points of your offer - so if you offer 100 mm, you would get 3 mm if another party outbids you at the end of the day. In many bk cases, noone steps forward to serve as SH, and in those cases I've watched that do, I can't remember many that had 3 offers.
