very complicated foreclosure situation

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Hi -- help!

I am the holder of a third trust which is going to foreclosure auction this week (initiated by the holder of the first). Here are the factors:

(1) house probably not worth much more than the first note and possibly, part of the second (with interest, penalties, attorney's fees, etc.)
(2) house is occupied, not by the owner, but by a "tenant" who has not paid rent for a year; but has put about $50,000 of improvements into the house (he originally had a contract for sale with the owners)
(3) wife (house is co-owned with husband she is divorcing) has filed for reinstatement of bankruptcy (her first petition was dismissed) and we won't know until we get to the courthouse if the petition is reinstated
(4) there is an IRS lien on the husband which has been filed on the house

Further facts and questions: (1) will reinstatement of the wife's bankruptcy stop the foreclosure? (2) the owner of the first lien is planning to bid (but not beyond amount of the lien) (3) second lienholder is not planning to attend (but I assume is protected) (4) "tenant" is planning to bid, wants the house (5) I have told the "tenant" that I plan to bid above the amount of the first and second lien (6) "tenant" is trying to cut a side deal with me thinking he can wipe out the second lien holder (I've said he can buy my mortgage - but I won't do any "deal" which could be considered possibly illegal in terms of the second lien holder).

Would it be worth anything to me (in terms of strategy or legal position) to try to purchase the second lien at a discount?

I'm willing to play hardball with the "tenant" and buy the house, although I don't want to go over what I think it's worth.

Any ideas or suggestions would be appreciated.