In my last life, that was the only way a director (or any employee, for that matter) could acquire bank-owned property, although we did make an exception for a branch that had potential environmental problems the director agreed to assume.
The theory is that a public sale is arms length true market value. That theory could be turned on its head if your director knew your bidding strategy for the property, or what the outstanding balance was on a loan secured by the property, though.
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The opinions expressed here are personal and do not represent opinions of my employer.