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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts: Knightswood Financial Corp. Maurice Levesque President and Director [phone] [e-mail]