Leathers are funny... My two "die" surprisingly frequently for anywhere from hours to weeks. One does it half the time when I use cleaners on the stovetop about five yards away from the tank. None of the other corals show any reaction to this.
Many species of leathers fairly regularly shed a mucus mantle / outer layer of skin in response to stress and to clean garbage off their surface. Bright colors in leathers can mean that they come from lower light environs, so you may have shocked it by putting it into an SPS MH tank. So, if the mucus mantle is shedding, it will look like it is absolutely dying for a few days to few weeks, then recover completely once it is in a happier place. If it is actually losing real tissue, not the mantle, then it will be dead pretty soon unless you frag any pieces that still look OK and get them to a happier light + chemistry.
Also, a smooth
leather coral can often be an unhappy leather coral. If there are tiny dimples on the surface, then the polyps are retracted into the main body to hide them from whatever is stressing the coral. I can't find any pictures of a genuine leather coral without polyps in Borneman or Fenner's references. Most are happy with high light and water flow, but
soft corals and stonies do have different needs and regular go into chemical warfare mode versus each other. They also tend to be perfectly happy with fragging.
EDIT:
Checked in Borneman's work... There is a leather coral disease / condition that looks similar to the perfectly normal shedding behavior. After a state of being unexpanded for potentially several weeks, the tissue becomes cheesy and starts to degenerate. Holes or rotting tissue starts to show up. The best treatment is to do freshwater or Lugol's dip and possibly cut out any affected areas, then let the coral heal itself. Excepting this cropping up in some totally healthy Sarcophytons, the condition is considered to be associated with poor tank conditions and/or stagnant water flow.
If algae was growing on it, you may have had insufficient flow, plus the previously mentioned potential of too-bright lights.