Hotel security was summoned to the actor's room at about 2 a.m. by an unidentified woman who said the actor was throwing furniture and yelling. His publicist blamed an allergic reaction to medication.
When police arrived at the posh hotel they reportedly found Sheen naked, incoherent and apparently highly intoxicated.
The celebrity was not arrested, but was taken to a hospital for psychiatric evaluation. He was released Tuesday evening.
"It seems like Charlie Sheen has dodged a bullet again," said Jeanne Wolf of Parade Magazine. "Though no one wishes him ill, a lot of people are afraid that there will come a time that his behavior will be so self-destructive that it'll do him in."
Richards appeared on HLN's "The Joy Behar Show" and discussed the incident.
"I do know what happened," Richards said. "I'm trying to protect the girls from it as much as possible."
The star of the series "Two and a Half Men" has had problems related to drug and alcohol use.
In August, he pleaded guilty in Aspen, Colo., to misdemeanor third-degree assault after a Christmas Day altercation with his wife, Brooke Mueller Sheen. He avoided jail time, but was sentenced to 30 days in a rehabilitation center. He was also given 30 days probation and ordered to get 36 hours of anger management counseling.
Mueller Sheen, who is the mother of twins with Sheen, told police that the actor threatened to kill her and brandished a knife after she told him she wanted a divorce.
The 45-year-old also went through a bitter divorce and custody battle with Richards.
In 1998, his father, actor Martin Sheen, turned him in for violating parole after a cocaine overdose sent him to the hospital. He was ordered to undergo a rehabilitation program.
The Associated Press contributed to this report.