Quadrant Structured Products Co. v. Vertin, 23 N.Y.3d 549

Quadrant Structured Prods. Co., Ltd. sued Athilon Capital Corp. and related entities in Delaware Chancery for breaches of fiduciary duty and fraudulent transfers tied to Athilon’s high-risk credit derivatives platform.
Athilon issued subordinated, senior subordinated, and junior notes; Athilon’s capital consisted of $100M equity and $600M debt, with EBF & Associates controlling Athilon’s board after acquiring it in 2010.
Indentures created Trustees to administer the securities and set forth investor remedies; the indentures’ no-action clause limited actions to those under the indenture with a Trustee-suit mechanism for defaults.
Quadrant argued the Athilon no-action clause only barred indenture-based claims, not common-law or statutory securityholder claims arising outside the indenture.
The Court of Chancery remanded to New York-law analysis, distinguishing Feldbaum/Lange from Athilon; Chief Judge Lippman’s court concluded the Athilon clause applies only to indenture-contract claims, not Quadrant’s broader claims.
Delaware Supreme Court certified two questions about New York-law interpretation of the no-action clause and the correct remand interpretation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a no-action clause covering only the indenture precludes independent securityholder claims.	Quadrant—Quadrant argues Athilon clause excludes securities claims.	Athilon/EBF—Clause covers all securityholder actions to prevent duplicative suits.	No; clause limits to indenture claims, not independent securityholder claims.
Whether the Vice Chancellor correctly applied New York law on the Athilon clause as interpreted in the remand.	Quadrant—Remand allowed non-indenture claims to proceed.	Defendants—New York law supports broader bar.	Affirmative; clause does not bar non-indenture claims; two claims and part of a third barred as to indemnity-based actions.

General Inv. Co. v Interborough R.T. Co., 235 N.Y. 133 (N.Y. 1923) (no-action clause did not bar non-indenture proceedings; distinction from lien/enforcement)
Cruden v. Bank of N.Y., 957 F.2d 961 (2d Cir. 1992) (no-action clause cannot bar claims not under the indenture; broad clause required)
Greenfield v Philles Records, 98 N.Y.2d 562 (N.Y. 2002) (contract interpretation; plain meaning governs)
J. D’Addario & Co., Inc. v. Embassy Indus., Inc., 20 N.Y.3d 113 (N.Y. 2012) (contract interpretation; no-action clause narrowly construed)
Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 N.Y.3d 470 (N.Y. 2004) (strict construction of contract terms; expressio unius)
McMahan & Co. v Wherehouse Entertainment, Inc., 65 F.3d 1044 (2d Cir. 1995) (federal claim preclusion by no-action clause; state claims barred)
Lange v Citibank, N.A., 2002 WL 2005728 (Del. Ch. 2002) (no-action clause extending to securities where language encompasses both indenture and securities)