Knightswood Financial Corp.: Disposition of Subsidiary-VSM RRSP Distressed Corporation

Knightswood Financial Corp. (TSX VENTURE:KWF) announced today that it has
exercised its put option to sell all the shares of VSM RRSP Distressed
Corporation to an unrelated party. The effective date of this transaction is
July 7, 2011.


About Knightswood Financial Corp.

Knightswood Financial Corp. ("Knightswood") was incorporated in 1987 and
operates as a merchant bank providing private entities ("Clients") with
solutions to allow them to issue debentures that are eligible for registered
plans (e.g. RRSPs, TFSAs, pension plans, etc). To assist its Clients,
Knightswood establishes a subsidiary company for each Client which allows the
Client's debenture product to be eligible for registered plans. 


Once the subsidiary company is created for our Clients, Knightswood will either
own all or a majority of the voting rights in the subsidiary company.
Knightswood is not involved in the day-to-day operations of a subsidiary
company, but rather, it is independently managed and controlled by the
respective Client's management team. In addition, Knightswood does not govern
the subsidiary company's operating and financial polices so as to obtain
benefits from its activities. Everyone's interests are safeguarded by a "put and
call" option termination agreement between Knightswood and the Client.