In a cost-cutting action that many dealers may be forced to emulate, Michael Hue-Williams closed his splashy 11,000-square-foot London gallery, Albion, in late June and will relocate to smaller quarters. The decision followed fruitless lease negotiations with the landlord of the gallery’s ground-floor space in a Norman Foster-designed building in Battersea overlooking the Thames. The Hong Kong-based Hutchinson Whampoa Ltd. had granted Albion favorable rental terms during its first few years of operation, but that agreement had expired. Shortly after quitting his riverside quarters, the dealer put Michael Hue-Williams Fine Art Ltd. into administration, the U.K. equivalent of Chapter 11 bankruptcy.

Word of Hue-Williams’s plight spread after Albion’s creditors received a letter from Geoffrey Martin & Company, the London-based bankruptcy and corporate-recovery specialists, notifying them of the voluntary liquidation and informing them that the firm’s partners, Stephen Goderski and Geoffrey Martin, would be handling the administration.

How many creditors are involved and how much they are owed is unclear. A Martin & Company spokesman, James Sleight, will comment only that "it’s still early" and that the filing gives the gallery time to settle its debts.

Apart from landlord trouble, Hue-Williams cites the flagging art market as a major factor in his financial woes. "This decision is really born out of knowing that [the boom] part of the art cycle is over," he says, noting that the gallery’s turnover was down more than 50 percent this past year. "Very large exhibitions and very large works of art are just not going to find buyers in this climate."

Albion had been a major player during flush times. In its Battersea space, which opened in 2004, it staged large solo exhibitions of such international artists as Ai Weiwei, Cai Guo-Qiang, Mark di Suvero, Jitish Kallat, James Turrell and Xu Bing and hosted private gourmet luncheons to which guests were chauffeured from central London. In 2005 Hue-Williams brought on Lance Fung — the New York-based curator and gallerist known for his stint as director of Site Santa Fe — to develop in-house projects. In 2008 he hired David Ross, the former director of the San Francisco Museum of Modern Art, to run Albion’s New York outpost, which launched in a temporary space in SoHo in June 2008. At the time, Hue-Williams told Artinfo.com, "By establishing Albion New York, we will be building the reputations in the U.S. of the major contemporary Asian artists we represent."

But just months after moving the New York operation to a town house on the Upper East Side this past January, Hue-Williams shuttered it. He also canceled Albion’s booths at Art Dubai and Art HK 09, in Hong Kong. Characterizing these decisions as "prudent," the dealer adds that he intends to return to the latter fair next year because of its importance to the business the gallery generates in Asia.

In the midst of all this, the dealer is embroiled in a legal battle. In a suit filed in U.S. District Court in New York, Hue-Williams alleges that Turrell owes him commissions on a new series of the artist‘s "Tall Glass" sculptures still in prototype that Albion "presold" to collectors for sums in the mid-six figures. The gallery is asking the court to order Turrell to complete the works, while the artist, disputing its right to presell them, is demanding that Albion disgorge commissions in excess of $769,000 relating to these "phony" sales and pay additional punitive damages.

Hue-Williams’s attorney, Peter Stern, of the New York firm McLaughlin & Stern, says that his client contends he was authorized to presell 10 "Tall Glass" works, each priced between $300,000 and $700,000, "as best evidenced by completion of the sale [of one of them] to a very important art world figure," who court papers name as Louise Blouin, the publisher of Art+Auction. A source close to the matter says that Hue-Williams has returned the money for eight of the nine uncompleted transactions.