I don't think it's beyond the realms of possibility to suggest that the board have neglected to include relegation pay-cuts in the players' contracts. It'd be negligent, but hey, it's Raith Rovers. If the board were competent, we wouldn't be fucking relegated.
Even allowing for that, however, it would still be madness to empty the entire squad within hours of a play-off defeat. There are players there who could be moved on for very modest fees or sell-on clauses, and more importantly, who could drag us back out of League One. I can't begin to understand the logic, I can only assume it's a misplaced rumour.
That said, nothing about this club surprises me anymore.