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
