A fee paid to the stalking horse from the proceeds of a 363 sale if it is not the successful bidder. The fee has been justified on various grounds, including compensation to the stalking horse for adding value for jump-starting the sale process by entering into a purchase agreement. The stalking horse is also frequently granted the right to reimbursement of its actual expenses incurred in connection with its pursuit of the debtor’s assets including costs associated with negotiating the terms of sale and due diligence.
See also 363 Auction, 363 Sale, Asset Sale, Bid Protections, Stalking Horse.