There are a number of considerations that are both fact-specific and recommendation-specific. Is it a capped superpriority? Is it a capped preferred claim? For some of the considerations around international, I think it's worth noting that no one has a superpriority. No other country in the world has a superpriority, so to the questions earlier about competitiveness, we actually have a superpriority for unfunded pension contributions that were due off employment from their most recent wages. We don't have a superpriority for unfunded pension liabilities. It is worth noting that the recognition of international examples is that no one actually has such a system. There are some that have looked at some of these preferred claims.
On the questions of caps, again, it would depend on whether you're talking about a capped superpriority or a capped preferred claim, and on whether or not that would be a capped claim in restructuring or a capped claim in insolvency. Those have very different functions, as indicated. If there's a capped preferred claim in restructuring, it would still rank below secured creditors in an insolvency, which would prompt secured creditors to potentially seek a liquidation to ensure they had greater access to their assets.
It's also worth noting that in some cases even a capped claim potentially has two consequences. One is whether or not it would still have the capacity to scupper the chances of a restructuring. In a given example, if we look at a recent restructuring of a steel company, a capped preferred claim for unfunded pension liabilities when there are 20,000 pensioners, even at $20,000 per pensioner, would still result in significant losses for pensioners.
In that example, 20,000 pensioners would have a claim of $400 million. The capped preferred claim would likely have to be paid as part of the CCAA restructuring plan to be effective, because otherwise, essentially, we're going to prompt the insolvency, as we indicated. Secured creditors would have no reason to support a CCAA plan that would pay unfunded liability in full and reduce their potential recovery. In this particular case, the liquidation value of the entire entity was $400 million. Secured creditors would prefer a BIA liquidation that would pay secured claims first.
The capped preferred claim could result in some recovery for pensioners after secured claims, but the loss would be very significant. In this particular instance, what we ended up seeing was actually a restructured entity with a continued going concern company that was making pension obligations.
I'd have to see very specifically what the proposal on caps was and how exactly it was noted. I'll just note that caps themselves don't necessarily take away from some of the theoretical considerations, as well as real-life considerations around whether or not they will still lead to liquidations and not restructurings, increase the cost of capital and see more entities potentially fail to survive and therefore actually place pensioners and workers at risk.