In re Hawaiian Electric Industries, Inc. Stockholder Derivative Litigation

The federal district court for the District of Hawaii approved a $100 million settlement to resolve a shareholder derivative action filed against officers and directors of Hawaiian Electric Industries, Inc. (HEI), the largest electricity supplier in Hawai‘i, in connection with the 2023 Maui wildfires, which killed more than 100 people and destroyed thousands of homes. The shareholder plaintiffs alleged that certain HEI directors and officers caused and exacerbated the fires because they “knew about the risk of severe weather events, knew that HEI’s equipment was inadequately maintained, and knew that the company’s safety protocols were insufficient” and “downplayed the risks, too, by making false statements that misled government agencies, HEI shareholders, and the public.” The plaintiffs estimated that the defendants’ wrongdoing would cost HEI more than $3.8 billion from settlements, litigation expenses, infrastructure investment, compensation to the individual defendants, and credit downgrade. The court found that the amount of the settlement—which was to be paid to HEI and its subsidiary Hawaiian Electric Company—was fair, reasonable, and adequate. The court also found that the plaintiffs’ requested fees and expenses—which included $25 million in attorney fees—were reasonable.