If an owner has not renewed his team for the upcoming year, the AI will re-sign any players in the last year of their contract at the end-of-season stage (as much as it would if it was running the team). If an owner is renewed but has not logged in for a specified time period (I am thinking it's either 2 or 4 weeks, it coincides with when the free agent warning starts showing up) then they are removed from the upcoming season and it is treated as if the owner did not renew.
If the AI is in charge of the team during the offseason, it will attempt to renew any final year contracts, so if an owner takes over a team near the end of the season (close enough that he wouldn't be removed for inactivity) and disappears immediately, he shouldn't have any final year contracts that would be needing renewal, or if he does they should only be players that the AI has decided are not able to be renegotiated under the cap.