A recent Court of Chancery decision underscores how much weight LLC drafters place on a single word, and how exposed a member can be when that word does not say what it needs to say. In USAB NY Inc. v. Glic Health LLC, C.A. No. 2026-0052-CDW (Del. Ch. May 20, 2026), Magistrate in Chancery Wright issued a Report recommending denial of a member’s motion for judgment on the pleadings in an advancement action.

USAB NY Inc., a 50% member of Glic Health LLC, had sued Glic’s other 50% member and manager, Christopher Jacobs, alleging breaches of contract, bad faith, willful misconduct, self-dealing, breaches of fiduciary duties, and related claims. USAB also asserted aiding and abetting claims against Glic’s nonvoting member and COO, Alexander Glovsky. USAB then turned to Glic itself, demanding advancement of the fees it was incurring in prosecuting those claims.

The demand rested on a provision in Glic’s operating agreement requiring the company to “indemnify, defend, and save harmless” each member from losses incurred by reason of the member’s status. Because “indemnify” and “save harmless,” standing alone, do not create advancement rights under established Delaware law, USAB zeroed in on “defend.” Its theory was essentially a transitive construction: “defend” means “advance,” and “advance” includes funding offensive litigation, so “defend” must require Glic to bankroll USAB’s affirmative claims on an ongoing basis.

The court rejected this argument as a basis for judgment on the pleadings, finding the term “defend” ambiguous on two independent grounds.

First, the court held that “defend” does not unambiguously mean “advance.” Magistrate Wright relied heavily on Fillip v. Centerstone Linen Services, LLC, where the Court of Chancery found that nearly identical “indemnify, defend and hold harmless” language was, standing alone, ambiguous as to advancement. In Fillip, a second sentence in the LLC agreement, contemplating repayment of prepaid expenses, cured the ambiguity by confirming advancement was intended. Glic’s operating agreement contained no such clarifying language. The court also distinguished Brody v. DCiM Solutions, LLC, which had stated that “defend” is “understood in this context to create a right to advancement,” noting that Brody relied on the Master’s report in Fillip rather than the Vice Chancellor’s subsequent opinion finding the term ambiguous. And the court cited REJV5 AWH Orlando, where the court held as a matter of law that “defend” paired with “indemnify” and “hold harmless”, even with a “fullest extent permitted” clause, did not create an advancement right.

Second, even assuming “defend” means “advance,” the court found that it does not unambiguously extend to offensive litigation expenses. Dictionary definitions of “defend” do not generally encompass “attack.” USAB conceded it could not cite a single reported decision where the Court of Chancery construed “defend” to require advancement for affirmative litigation initiated by the party seeking advancement. And the court flagged a policy concern: under USAB’s reading, Glic would be obligated to fund offensive litigation expenses not just for its members, but for every agent, officer, partner, employee, representative, director, and stockholder of any member, manager, agent, or officer of Glic—a potentially sweeping commitment that seems unlikely from a single word.

Finally, the court rejected USAB’s argument that the phrase “to the fullest extent permitted by law” resolved the ambiguity. Magistrate Wright characterized this as a “savings clause” that serves a rights-protecting, not a rights-creating, function. It preserves whatever rights the operative language creates, but it does not make ambiguous language unambiguous or manufacture rights the parties did not contract for.

The case is a useful reminder for LLC practitioners. As I have previously discussed in the context of corporate advancement rights, the details of the governing documents matter enormously. If the parties intend to provide for advancement, and particularly advancement of offensive litigation expenses, the operating agreement should say so explicitly. Relying on “defend” within the “indemnify, defend, and save harmless” formulation, without more, leaves the question open to competing interpretations and, as this decision demonstrates, will not support disposition on the pleadings.