That's a myth. There was no "incident". As a 1990s ITK, I can tell you that categorically. Makes me laugh how many people repeat this baseless rumour as gospel. It's a bit like the one about Franny owning Kinkladze's registration, so if the player left, all the money would go straight into Lee's pocket. I must have heard that one from ten different people at least, but it was also a complete fabrication.
Coppell took the job even though his wife didn't want him to because she was happy based in the south. After he'd accepted the position, she then refused to move north and was threatening to divorce him. City offered him compassionate leave to go and sort his marriage out but he refused it.
All of this is true, and is hinted at in Blue Moon Rising by Andy Buckley and Richard Burgess, published in 2000. That book is the best behind the scenes look at City from about 1993 to our promotion back to the Prem under Royle. However, it's almost certain also that Coppell refused the compassionate leave and insisted on quitting instead because he realised he'd been misled as to just how bad things were at the club, and he realised that he'd never be able to achieve the aim of promotion, the possibility of which had led him to take the job.
There was a more credible rumour at the time that Coppell was refused permission to bring in two layers who'd have cost a total of £500K because FHL didn't rate them and to make changes to the coaching staff (he'd promised on his arrival that, apart from bringing in Phil Neal, he'd work with the existing staff, but he supposedly decided quickly that changes were needed). However, I can't confirm categorically whether or not this story is true.
Anyway, ask yourselves this. If there had been an incident of the sort rumoured that involved Coppell and he left as a result, why did the club give him a settlement agreement requiring him to keep silent about his time at the club in return for £50K.
As for how I felt about it, I was shocked more than anything - Kendall's departure also came out of the Blue, but the big thing about that one was that we lost a manager who many people, including me, thought would deliver real success. With Coppell, it seemed to be a confirmation of the fact that the club was declining more rapidly than anyone had thought possible: if we couldn't hold onto a manager for even five weeks, we must really be in the sh!t!