Mundheim received the offer from Robert Carswell, an old Shearman & Sterling friend. Mundheim served as General Counsel from 1977 until 1980, and he describes the experience as one of the most rewarding of his life.

“It was immensely fascinating and challenging. There was enormous breadth to the things that you had to know because it ranged from doing the guarantees of New York City debt, the bailout of Chrysler, opening up formal relations with China, the Banking Act of 1978, and the freeze of Iranian assets,” Mundheim says.

As he approached the end of his term under President Jimmy Carter, Mundheim planned to return to the academic life at Penn. But in January of 1980, he was called on to help secure the release of the 70 American hostages who had already been held for over 400 days.

The U.S. sent a Treasury team to London to negotiate the destination of the frozen Iranian government assets, and Carswell came to Mundheim to head up the team.

After negotiating with the Bank of England to be the stakeholder of the assets, Mundheim travelled to Algeria with the other negotiators to complete the release of the hostages. After 12 intense days in January, the Iranians agreed to release the hostages, and they were sent home on President Reagan’s first day in office—timing which is frequently seen as suspicious.

“The question has always been whether the Iranians planned it that way, whether or not they had a particular animus towards Carter,” Mundheim says.

While Mundheim says the challenge of the negotiations made them worthwhile.

“It was a ten day negotiation, but all the things that you do have problems that you have to surmount and sometimes you are lucky and find a way to do it fairly rapidly, and sometimes you stub your toe pushing,” he says. “But ultimately you accomplish whatever you are going to accomplish.”

BACK TO ACADEMIA

After defusing one of the scariest foreign relations crises in the Cold War, Mundheim returned to Penn to become University Professor of Law and Finance—one of only 19 professors designated as “University” professors, a title which honored accomplishment in more than one field.

But in 1982, fate and fortune struck again, and Mundheim was tapped to head the Law School as Dean.

Mundheim served as the Dean of Penn’s Law School until 1987 before returning to the private sector for the first time in 26 years, taking a job with the law firm Fried, Frank, and Harris.

“One of the things that I have learned is that one of the most important choices you make is when to stop,” he says of leaving academia. “You should always try to have that be a choice you make and not one that somebody else makes.”

Less than five years after Mundheim joined Fried, Frank, and Harris, he received another phone call from a person in power looking to utilize his knowledge and talent. This time, it was billionaire Warren Buffett.

In 1991, the trading house of Salomon Brothers had fallen on hard times after a large-scale t-bill scandal. Buffett, who owned a significant share of the company, stepped in and asked Mundheim to join a team charged with rebuilding the trading house.