HAWAIIAN ELECTRIC INDUSTRIES INC Material Event - What Happened

Hawaiian Electric Industries (HEI) has reached a significant milestone in addressing its legal challenges stemming from the 2023 Maui wildfires. This summary breaks down the recent developments, focusing on what matters most for investors.

Event Description

Hawaiian Electric Industries (HEI) and its subsidiary, Hawaiian Electric Company, Inc., have agreed to a $100 million settlement to resolve several major shareholder lawsuits. These lawsuits, known as "stockholder derivative actions," were brought by shareholders who alleged that certain company directors and officers failed in their duties concerning the devastating 2023 Maui wildfires.

This settlement also contributes a substantial $47.75 million toward resolving a separate "securities class action" lawsuit. This type of lawsuit typically claims that a company or its executives made misleading statements to investors, in this instance likely regarding wildfire risks and financial disclosures.

Shareholders filed these lawsuits following the catastrophic 2023 Maui wildfires, accusing HEI's leadership of mismanagement and breaches of fiduciary duty related to wildfire prevention, infrastructure maintenance, and public safety. The securities class action likely focused on allegations that the company did not adequately disclose its wildfire-related risks to investors.

By settling, HEI aims to conclude these specific legal battles, avoid the uncertainty and high costs of prolonged litigation, and allow management to concentrate on core operations. Importantly, the company is not admitting any wrongdoing or liability as part of this settlement.

Event Date/Timeline

The settlement agreement was signed on December 31, 2025. A federal court in Hawaii granted preliminary approval for this settlement on March 9, 2026.

Key dates for final approval and objections include:

• May 7, 2026: Deadline for anyone to object to the derivative settlement.
• May 28, 2026: Final approval hearing for the derivative settlement. If approved, these specific legal claims will be officially dismissed.
• August 13, 2026: Final approval hearing for the separate securities class action settlement.

Impact Assessment

This settlement marks a significant step for HEI, but investors must understand its specific scope:

• Resolution of Specific Lawsuits: This agreement concludes three specific derivative lawsuits filed in Hawaii and California, and significantly contributes to resolving the securities class action. This removes a layer of legal uncertainty tied to these particular shareholder claims.
• Reduced Legal Distraction: Lengthy and costly legal battles consume management's time and resources. Resolving these specific shareholder actions frees the company to focus on its operations with fewer legal distractions and less potential reputational damage from these cases.
• Crucial Distinction: Unresolved Wildfire Liabilities: It is vital for investors to understand that this settlement does not resolve direct claims from wildfire victims, subrogation claims from insurers, or other significant liabilities related to the 2023 Maui wildfires. These substantial potential future costs and risks for the company remain ongoing.

Stakeholders Affected:

• Customers (especially on Maui): While this settlement does not directly compensate wildfire victims, resolving these shareholder disputes can help stabilize the company. A more stable Hawaiian Electric can better rebuild infrastructure, invest in grid hardening, and provide reliable service amidst ongoing wildfire challenges.
• Employees of Hawaiian Electric: This settlement helps reduce uncertainty about the company's financial future and legal liabilities, fostering a more stable work environment.
• Investors/Shareholders: This is a positive development for investors concerning these specific claims, as it removes a portion of legal risk without a direct financial impact on the company. However, investors must remain aware of the significant unresolved wildfire liabilities.
• The State of Hawaii: A more financially stable Hawaiian Electric is better positioned to invest in critical infrastructure and support the state's energy goals.

Financial Impact

The company's insurers will cover the entire $100 million settlement payment, not Hawaiian Electric's own cash reserves. This is a major positive, as it protects the company's balance sheet from these specific claims.

However, as noted, this settlement does not resolve the direct claims from wildfire victims, subrogation claims from insurers, or other significant liabilities related to the 2023 Maui wildfires. These ongoing issues represent substantial potential future costs and risks for the company.

Key Takeaways for Investors

• Partial Resolution, Not Full Clearance: This settlement is a positive step, resolving specific shareholder lawsuits related to the Maui wildfires with insurers covering the cost. However, it addresses only a portion of HEI's total legal exposure.
• Significant Unresolved Liabilities Remain: Investors must recognize that substantial liabilities from direct victim claims, subrogation claims from other insurers, and other legal actions related to the Maui wildfires remain unresolved. These ongoing legal challenges could still materially impact the company's financial health and future operations.
• Reduced Legal Overhang: The settlement removes a major "legal overhang" from these specific shareholder actions, which could have otherwise weighed on the stock price.
• No Admission of Guilt: HEI's non-admission of liability is favorable for the company's reputation and future legal defenses.
• Key Dates to Watch: Mark your calendar for May 28, 2026, for the final court approval of this derivative settlement, and August 13, 2026, for the final approval of the securities class action settlement.
• Do Your Own Due Diligence: This summary provides key insights, but always conduct your own thorough research, consider your financial goals and risk tolerance, and consult with a financial advisor before making any investment decisions. Understanding the full scope of HEI's wildfire-related liabilities is essential.