The company earlier this month had skipped an interest payment on senior debt, beginning a 30-day window as to either make good or default. Diamond's (NYSE:DO) total debt load is about $2B, and the paper has recently been trading hands at pennies on the dollar. Shares in DO closed Friday at $0.94.

Diamond employs 2.5K and had revenue just shy of $1B last year.

Loews (NYSE:L) is the majority owner of the company.

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