Hawaiian Electric Industries Inc. was sued by investors who claim that the utility’s share price has been hit in the wake of the deadly Maui fire because its wildfire safety procedures were inadequate.
(Bloomberg) — Hawaiian Electric Industries Inc. was sued by investors who claim that the utility’s share price has been hit in the wake of the deadly Maui fire because its wildfire safety procedures were inadequate.
Despite knowing the threat that wildfires posed to Maui, the utility’s compromised safety protocols put the island at a heightened risk, according to a lawsuit filed Thursday in San Francisco federal court.
The omissions contributed to the “precipitous decline in the market value of the company’s securities,” the investors claim, adding that they suffered “significant losses and damages” as a result. The utility’s share price has plunged 69% since July 26.
Numerous lawsuits have been filed alleging that Hawaiian Electric’s power lines contributed to the fires that destroyed much of Lahaina, Hawaii, earlier this month. Until now, the suits have been property damage and wrongful death claims based on arguments the utility kept power on despite high-wind warnings, and that it didn’t follow through on safety upgrades for its equipment.
The suit filed in San Francisco appears to be the first securities fraud lawsuit that focuses on the impact on investors rather than island residents. Similar to other suits against the company, it also blames Hawaiian Electric for failing to maintain a plan to cut electricity off in areas where strong wind events could cause the fires to spread.
The suits say the utility’s internal files show officials were aware power shutdowns could have helped avoid wildfires, but failed to implement them.
Read more: Maui Fire Lawyers Eye Tactic That Got Californians $13.5 Billion
Potential liabilities could reach almost $4 billion if the utility is deemed negligent, according to investment research firm Capstone LLC, which would dwarf the company’s current market capitalization.
Hawaiian Electric didn’t immediately respond to an email seeking comment on the suit. Previously the company has said it doesn’t comment on pending litigation.
The case is Bhangal v. Hawaiian Electric Industries Inc., 23-cv-04332, US District Court for the Northern District of California (San Francisco).
(Updates with missing power shutoff plan in fifth paragraph.)
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