In 1961, Vickers, Christy & Co. (Vickers, Christy), an underwriter, was unable to pay its debts and became insolvent, and Kupferman (plaintiff) was appointed as the receiver, managing the company’s matters through its insolvency. Among Vickers, Christy’s assets were 12,500 shares in Consolidated Research and Management Co. (Consolidated) (defendant) that the company had received pursuant to an underwriting agreement in 1960; however, by 1962, these shares had lost much of their value. Kupferman filed suit against Consolidated based on these shares, alleging that Consolidated had not complied with SEC filing requirements. During the course of preparing for litigation, Kupferman’s attorney, Ross, found an agreement between Vickers, Christy and Consolidated, releasing Consolidated from liability for breach based on the lost value of the shares. Ross did not disclose this document to Consolidated, and in 1962 Kupferman won a judgment against Consolidated. Because Consolidated did not have enough corporate assets, the judgment was unenforceable. Kupferman brought suit against the directors to satisfy the judgment. In 1971, during the course of that litigation, one of Consolidated’s directors, Jacobsen, found the release executed by Vickers, Christy and Consolidated. Jacobsen filed a motion to vacate the 1962 judgment against Consolidated. The court denied the motion to vacate the judgment, and Jacobsen appealed.