UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): Commission File Number July 24, 1996 1-8233 USF&G CORPORATION (Exact Name of Registrant as Specified in Charter) Maryland 52-1220567 (State or Other Jurisdiction (IRS Employer Identification No.) of Incorporation) 100 Light Street, Baltimore, Maryland 21202 (Address of Principal Executive Offices) (410) 547-3000 (Registrant's telephone number, including area code) USF&G CORPORATION FORM 8-K ______________________ Item 5. Other Events LGT Asset Management and its parent, Liechtenstein Global Trust ("LGT"), and Chancellor Capital Management, Inc. ("Chancellor"), announced today that a definitive agreement has been signed under which LGT will purchase Chancellor. The total consideration for Chancellor could reach a maximum of $300 million, contingent upon the level of growth in the business over the next five years. Significant long-term incentives are included to retain key employees. United States Fidelity and Guaranty Company, a wholly owned subsidiary of USF&G Corporation, holds an approximate 44.5% ownership interest (on a fully diluted basis and assuming conversion of preferred stock) in Chancellor. If thetransaction closes in accordance with the agreement announced today, then USF&G expects to report a realized capital gain of approximately $75 million. USF&G CORPORATION FORM 8-K ______________________ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized. USF&G CORPORATION By: DAN L. HALE Dan L. Hale Executive Vice President, and Chief Financial Officer July 24, 1996