content: FORM 8-K
  
                      SECURITIES AND EXCHANGE COMMISSION
  
                             Washington, D.C.  20549
  
                                CURRENT REPORT
  
                    Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported) December 3, 1996
  
                            CHANCELLOR CORPORATION
            (Exact Name of Registrant as specified in its charter)
  
  Massachusetts       0-11663                  04-2626079
  (State or other     (Commission              (IRS Employer
   jurisdiction of     File Number)             Identification No.)
   incorporation)
  
  745 Atlantic Avenue, Boston, Massachusetts   02111
  (Address of principal executive offices)     (Zip Code)
  
  Registrant's telephone number, including area code (617) 728-8500
  
                                      N/A
  (Former name or former address, if changed since last report)
  
  Item 1.   Changes in Control
  
       A transition has occurred in the management and Board of
  Directors of Chancellor Corporation (the "Company") to a group
  led by Vestex Capital Corporation and Brian M. Adley.  This
  transition is an outgrowth of fundamental differences related to
  the form, amount, and acceptable dilutive effect of the Company's
  equity capital raising efforts, operations, and other issues. 
  The Company's largest shareholder, Vestex Capital Corporation, as
  represented by Brian M. Adley on the Company's Board of
  Directors, has advocated one course of action while Stephen G.
  Morison, the Company's Chief Executive Officer and Vice Chairman
  of the Board, and certain other members of the Board have
  advocated another course of action.  The Company's Board of
  Directors determined that the differences were not amenable to
  compromise between the differing parties and represented a major
  disruption to the governance of the Company.  The Board has
  therefore agreed to transfer control of the Board of Directors to
  Vestex Capital Corporation.
  
       On December 3, 1996 the Company's Board of Directors
  unanimously adopted resolutions accepting the resignations
  submitted by Messrs. Dayton, Killilea and Morison as directors
  and Mr. Morison's resignation as an officer and approving the
  termination of the Voting Agreement dated April 11, 1996 among
  the Company, such individuals, Brian M. Adley and Vestex, other
  than Section 1.5 of such Agreement which relates to
  indemnification of directors.
  
       As a result of the termination of the Voting Agreement
  described above, all directors of the Company are now subject to
  election by plurality vote of the holders of the Company's Common
  Stock and Series AA Preferred Stock, voting together as a single
  class.  Vestex, whose stock ownership entitles it to cast a
  majority of the votes which may be cast by all stockholders, has
  sufficient voting power to elect the entire Board.  The sole
  remaining incumbent director, Mr. Adley, voted for the election
  of Messrs. Michael Marchese, Ernest Rolls and Rudolph Peselman as
  directors to serve until the next Annual Meeting.  Mr. Gerald
  Brauser was named as an advisor to the Board.
  
       Concurrently with the transition in control, Vestex Capital
  Corporation has lent $500,000 to the Company for one year at 2%
  above prime rate.
  
       The members of the Company's interlender group have
  consented to the foregoing transactions.
  
  Item 7.   Financial Statements, Pro Form Financial 
            Information and Exhibits
  
            None
  
                                   SIGNATURE
  
       Pursuant to the requirements of the Securities Exchange Act
  of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned hereunto duly authorized.
  
                                          CHANCELLOR CORPORATION
  
  
  
                                          By: /s/ William J. Guthlein
                                              William J. Guthlein
                                              Vice President, Treasurer
                                              and Chief Financial Officer
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text: FORM 8-K
  
                      SECURITIES AND EXCHANGE COMMISSION
  
                             Washington, D.C.  20549
  
                                CURRENT REPORT
  
                    Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported) December 3, 1996
  
                            CHANCELLOR CORPORATION
            (Exact Name of Registrant as specified in its charter)
  
  Massachusetts       0-11663                  04-2626079
  (State or other     (Commission              (IRS Employer
   jurisdiction of     File Number)             Identification No.)
   incorporation)
  
  745 Atlantic Avenue, Boston, Massachusetts   02111
  (Address of principal executive offices)     (Zip Code)
  
  Registrant's telephone number, including area code (617) 728-8500
  
                                      N/A
  (Former name or former address, if changed since last report)
  
  Item 1.   Changes in Control
  
       A transition has occurred in the management and Board of
  Directors of Chancellor Corporation (the "Company") to a group
  led by Vestex Capital Corporation and Brian M. Adley.  This
  transition is an outgrowth of fundamental differences related to
  the form, amount, and acceptable dilutive effect of the Company's
  equity capital raising efforts, operations, and other issues. 
  The Company's largest shareholder, Vestex Capital Corporation, as
  represented by Brian M. Adley on the Company's Board of
  Directors, has advocated one course of action while Stephen G.
  Morison, the Company's Chief Executive Officer and Vice Chairman
  of the Board, and certain other members of the Board have
  advocated another course of action.  The Company's Board of
  Directors determined that the differences were not amenable to
  compromise between the differing parties and represented a major
  disruption to the governance of the Company.  The Board has
  therefore agreed to transfer control of the Board of Directors to
  Vestex Capital Corporation.
  
       On December 3, 1996 the Company's Board of Directors
  unanimously adopted resolutions accepting the resignations
  submitted by Messrs. Dayton, Killilea and Morison as directors
  and Mr. Morison's resignation as an officer and approving the
  termination of the Voting Agreement dated April 11, 1996 among
  the Company, such individuals, Brian M. Adley and Vestex, other
  than Section 1.5 of such Agreement which relates to
  indemnification of directors.
  
       As a result of the termination of the Voting Agreement
  described above, all directors of the Company are now subject to
  election by plurality vote of the holders of the Company's Common
  Stock and Series AA Preferred Stock, voting together as a single
  class.  Vestex, whose stock ownership entitles it to cast a
  majority of the votes which may be cast by all stockholders, has
  sufficient voting power to elect the entire Board.  The sole
  remaining incumbent director, Mr. Adley, voted for the election
  of Messrs. Michael Marchese, Ernest Rolls and Rudolph Peselman as
  directors to serve until the next Annual Meeting.  Mr. Gerald
  Brauser was named as an advisor to the Board.
  
       Concurrently with the transition in control, Vestex Capital
  Corporation has lent $500,000 to the Company for one year at 2%
  above prime rate.
  
       The members of the Company's interlender group have
  consented to the foregoing transactions.
  
  Item 7.   Financial Statements, Pro Form Financial 
            Information and Exhibits
  
            None
  
                                   SIGNATURE
  
       Pursuant to the requirements of the Securities Exchange Act
  of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned hereunto duly authorized.
  
                                          CHANCELLOR CORPORATION
  
                                          By: /s/ William J. Guthlein
                                              William J. Guthlein
                                              Vice President, Treasurer
                                              and Chief Financial Officer