Paul Hoffman, in his excellent book, Lions of the Eighties,1983, (pp. 312-313) states, in part:
Because of its relationship with the despised Shah, Chase Manhattan was singled out for criticism by Iran's new revolutionary government. During 1979, National Iranian Oil Company payments had flowed through the Chase at the rate of $300 million to $500 million a month. Iran's new leaders shifted these payments to other banks, especially Bank of America. As a congressional report concluded: "What was a blessing in the days of the Shah quickly because a curse in the days of the Ayatollah."
Iran's enmity did not deter Chase's support for the Shah. In October 1979, McCloy joined David Rockefeller, chairman of Chase Manhattan, and former Secretary of State Henry Kissinger in urging President Carter to admit the ailing Shah to the United States for medical treatment.
According to the New York Times, this "high-powered, financial and political 'old-boy network' ... waged a campaign on behalf of the Shah's admission that was far more extensive on behalf of the Shah's admission than has previously been disclosed." McCloy "peppered" the White House and State Department with letters -- "John is a very prolific letter writer," then-Secretary of State Cyrus Vance recalled, "The morning mail often contained something from him about the Shah" -- while Rockefeller personally pleaded with President Carter.
In the end, Carter caved in -- and the Shah entered New York Hospital-Cornell Medical Center on October 22. This spurred a new surge of anti-American frenzy in 'Iran, culminating with the seizure of the U. S. Embassy by militant "students" on November 4.
The crisis escalated quickly on the financial front. On November 13 the Iranian Government made an "inexplicable" announcement that it intended to withdraw all its funds from American banks, giving President Carter time to invoke the International Emergency Economic Powers Act and freeze the Iranian accounts at 5:00 a.m. the following morning -- not only in U.S. . banks, but in American bank branches overseas. One thing the presidential order and accompanying Treasury regulations did NOT cover, however, was whether the banks were obligated to put the frozen funds in interest-bearing accounts. This oversight proved to be a major sticking point in the financial negotiations that eventually led to the hostages' release.
The following day -- November 15 -- Chase Manhattan, citing the freeze, refused to make a $4 million interest payment on a $500 million loan to Iran from a consortium eleven banks, led by itself. Chase Manhattan declared the loan in default on November 19 and on November 23 seized the accounts of Bank Markazi, Iran's central bank, to offset the debts of Iran's government. Six days later -- on November 29 -- Bank Markazi sued Chase Manhattan in London for release of $320 million deposited in Chase Manhattan's London branch. On December 6, Chase Manhattan filed suit in Manhattan's federal court against forty-seven Iranian concerns, including Bank Markazi and the National Iranian Oil Company for $366 million.
The great Iranian assets litigation explosion had started.
By the time the hostages were released fourteen months later, more than three hundred lawsuits attaching Iranian assets of more than $4 billion had been filed in federal courts around the nation. Other suits by American companies were started overseas. If the seizure of the Teheran embassy was a fifteen-month ordeal for the Americans held hostage there, it was a bonanza for the bar, generating millions of dollars in legal fees for more than one hundred major law firms. And neither the litigation nor the legal fees ended with the release of the hostages.
The lawyers fell into three camps.
First, there was the handful that represented Iranian interests. The Iranian Government retained Abourezk, Shack & Mendenhall, the Washington law firm of South Dakota's James Abourezk, the first man of Arabic stock to sit in the U.S. Senate. Bank Markazi was represented by Boudin, Rabinowitz, Standard, Krinsky & Lieberman, P.C., the Forty-second Street firm of Leon and Boudin, a civil-rights lawyer best known for defending anti-Establishment radicals like Daniel Ellsbery, Dr. Benjamin Spock, and Father Philip Berrigan. Kramer, Levin, Nessen, Kamlin & Soll, the Third Avenue firm once headed by Federal District Judge Eugene Nickerson, represented thirty-four other Iranian banks. Patterson Belknap represented the National Iranian Oil Company.
Second, there were the New York legal powerhouses that represented twelve major American banks that had loaned money to Iran or had frozen Iranian accounts on deposit -- Bankers Trust, Chase Manhattan, Chemical, Citibank, European American, Irving Trust, Manufacturers Hanover, Marine Midland, Morgan Guaranty, Continental Illinois, 1st National Bank of Chicago, and Bank of America. Robert B. Von Mehren of Debevoise and Plimpton, 1st National of Chicago's counsel in New York, served as chairman of the bank lawyers' steering committee.
Finally, there were the lawyers, scattered around the country, who represented more than three hundred American companies that had claims against Iran for such things as expropriated property and breaches of contract. Some of these companies bore familiar names like General Motors, Xerox, DuPont, Westinghouse, Union Carbide, and Lockheed; others were obscure ad hoc ventures. The claims ranged from a few thousand dollars all the way up to the $450 million sought by William Bikoff of Zashouran Mining Company, which had been nationalized. He was represented by Stuart A. Jackson of the Park Avenue firm of Burns Jackson Summit Rovings Spitzer & Fieldsman. The major committee of corporate creditors' lawyers was headed by Lawrence Newman of Baker & McKenzie's New York office.
Although virtually every major law firm -- in New York and elsewhere-- became involved in the Iranian assets litigation, only a handful of men played pivotal roles in resolving the hostage crises.
The Valley Times, June 18, 1994 reported, in part:
Dateline: Teheran, Iran: President Hashemi Rafsanjani accused the United States on Tuesday of reneging on secret assurances that Iranian assets frozen by the United States would be freed in exchange for Iranian mediation to gain the release of American hostages in Lebanon.
It was the first time since the Iran-Contra arms-for-hostages affair of the Reagan administration that a senior Iranian official had asserted that an American-Iranian deal had been reached for the release of Western hostages in Lebanon.
"We have ample reason to distrust the Americans," Rafsanjani said at a news conference.
"The U.N. secretary general had told us that if we use our contacts to free Americans and other Western hostages in Lebanon, the United States would release our assets."
"In this one instance, the Americans could have demonstrated their good will. But, in effect, they did not even live up to the promises of the secretary general."
Rafsanjani gave no details of the assurances from the United Nations. But he was apparently referring to the efforts of Javier Perez de Cuellar, who traveled to Iran twice in 1990 and 1991 when he was United Nations secretary general.
Militant Lebanese groups released 10 Western hostages in late 1991.