The "winning" offer was formulated such that its cash value depended upon the next best offer. I.e., when you strip away the complexity it was of the form "next best offer + $". That this bid "won" indicates the "auction" was not a sealed-bid auction of the kind you are thinking of.
Spivak|1 year ago
What makes it fine in the end is that once you collect all the bids and resolve the legal paperwork you can assign values to the individual bids and compare them which is how people who sell their homes choose what offer to go with. And home sellers do consider intangibles and go with lower-cash offers all the time.
I don't really understand what all the legal kerfuffle is about. Is the court really going to force the families into a sale they don't want when the sale is for their benefit however they choose to define it?