TX creditors say "we like Onion because we get more money", CT creditors say "we like Onion because fuck AJ", trustee sees all creditors like Onion, say "we go with Onion". And that's how The Onion won the bid despite offering less than FUAC.
Is that correct?

In reality, since TX holds 3.3% of the debt, FUAC will need to offer over 1.1MM (Onion's final offer) / 3.3% = 33.3...MM to beat Onion's offer for TX.
(Not sure about this part)

To make this offer better for the TX creditors, FUAC has to offer over 7MM so that CT creditors cannot uphold their promise to TX of "whatever you get from FUAC + 100k".

Onion offers 1.75MM, becomes 1.1MM
CT creditors get 1.1MM * 75% = 825k
TX creditors get 1.1MM*25% = 275k
But CT creditors say to TX "If you go with Onion, we'll give you some of our money so you get what FUAC will give you + 100k"
Which turns to:
CT: 825k - (812.5k - 275k) = 287.5k
TX: 812.5k