"I stayed out of it completely," said O'Sullivan. "All I know is that he wasn't real happy, he wanted a break and they agreed to part.
"He told me his plans and I said, 'Are you sure?'. He said he was, that was what he wanted to do and I said I would support him."
O'Sullivan added that he hadn't been involved in final negotiations over Lodge's initial Warriors contract, saying that was left up to chief executive Cameron George.
"He [Lodge] did it himself with them," said O'Sullivan. "Anything with a family member, I obviously don't have any association with."
O'Sullivan also dismissed rumours that Lodge had been talking to his Warriors teammates about Redcliffe, with Reece Walsh linked with the new team earlier this year.
"He wouldn't do that," said O'Sullivan. "And I wouldn't put him in that situation. So that I can categorically deny. He has obviously done nothing wrong, because if he had they wouldn't be paying him out."
Lodge's bizarre exit was the latest negative flashpoint in a tumultuous year for the team and former Kiwis and Warriors coach Frank Endacott holds fears for their prospects.
"Lodge leaving straight away and getting an almighty payout is the owners' prerogative but it has to have some impact on the squad for sure," Endacott told the Herald on Sunday.
"They've lost their two best props in the last week (Addin Fonua-Blake is injured) and that is where your game plan starts and finishes, in the front row."
"You need those big yardage men doing the job up front if your halfbacks are going to play, and they are not there now so it will be interesting to see how they get through that."
Endacott said the team also lacked experience and leadership, with the absence of Roger Tuivasa-Sheck still being felt.
"You need those leaders to get you through those tough situations and he is pretty hard to replace," said Endacott.
Endacott, who became a respected player manager after his time coaching the Kiwis (1994-2000) and Warriors (1997-1998) said the financial implications will also hurt.
"The worst part of the payoff is that it affects their cap for this year and next year," said Endacott.
Former Kiwis legend and Warriors foundation captain Dean Bell echoed those sentiments, saying the club has to move on but it won't be easy.
"It's a pretty heavy blow for the club - again - something they didn't need," said 26-test Kiwi Bell, who also filled recruitment, development and football management roles at the Warriors after his playing retirement.
"You don't get rid of a player and pay him out, unless there is good reason," said Bell. "It doesn't make financial sense but it doesn't make any footy sense too. There are ways to work through it - why did they have to get rid of him there and then?"
Like Endacott, Bell believes in the Warriors' potential but says this episode will sting.
"The club has to move forward but it is a pretty serious one," said Bell. "It has hurt the club in so many ways."