To address the questions asked in this thread and to clarify the whole situation:

Auctions and Cash system

Auction system allows you to continue bidding on any player if you have enough money to place the initial bid, as explained in this article. Here's a shorter explanation:

Because you only spend the cash after the auction is over (unlike tokens, which you spend for every bid), you can place bids on multiple auctions, as long as you can afford the initial bid (without taking the others into account). Here's an example:

You want to bid on Player A ($10 Million) and Player B ($5 Million), and you have $11 Million in your cash balance. System will allow you to bid on both of them, as you may want to be on both auctions at the same time, while really wanting to sign only one of them.

Player A is $10 Million with 2 minutes left and Player B is $5 Million with 20 minutes left before the initial round is over.

As mentioned, your balance is $11 Million, so you can bid on both of them. After Player A’s auction is over and you’ve won him, you’ll be deducted his price from your balance (let’s say you did buy him for exactly $10 million). That means you have $1 million left, but since you’ve already placed the initial bid on Player B, you can take part in it normally. However, you won’t be able to place a bid in the meantime on any player worth more than $1 million. In the event that you win the auction for Player B as well, your balance will go in the red.

Bankruptcy

When you are in debt, you have 7 days to revert the situation, and the system will warn you every day about it. The board will patiently wait and give you a whole week to go back to positive balance, and will remind you about it every day.

After 7 days, if you failed to revert the situation, bankruptcy mechanism kicks in, and the board executives of your club will try to solve it themselves. To do that, each day one of your best players will be sold in order to get out of minus. This will stop when your balance is positive again.

So, to prevent players from being sold automatically, get out of the minus as soon as possible cutting the expenses, selling some players, signing sponsorship contracts or taking bank loans.

This is also explained at the end of the same TopEleven.com cash/auction article I linked before.