Personal fortunes of HECO board members at risk in wildfire lawsuits

HONOLULU (HawaiiNewsNow) - The personal fortunes of some of Hawaii’s most prominent community leaders are in jeopardy because of the Maui wildfire disaster.

They are executives and board members of Hawaiian Electric companies and lawsuits being brought by HEI shareholders say they should personally pay millions in damages to the company.

Hawaiian Electric companies face hundreds of lawsuits over the Maui fires, demanding potentially billions in damages. But the shareholder lawsuits are different because they go after HECO executives and even board members, demanding they pay millions in damages.

San Diego attorney Darren Robbins is leading two of the cases and says board membership on a large public utility is not just an honorary position. “If you’re going to be elevated and accept a prestigious position like this, there are responsibilities that go with it,” he said.

Maui Wildfires Disaster

The allegations in the shareholder complaints have much in common with the property, personal injury and wrongful death lawsuits filed by wildfire victims — that the company knew its system vulnerable to high winds but shortchanged upgrades and didn’t have a plan to cut off power.

But shareholders in Hawaii and on the mainland want HEI Industries board directors held accountable to the company they say the leaders failed.

“The entire safety protocol regime at Hawaiian Electric was managed and overseen by the individual insiders, that is, the senior officers of the company and the directors,” Robbins said.

The directors of Hawaiian Electric Industries are a who’s who of local business and community leaders like retired Adm. Thomas Fargo, former state DLNR Director and insurance executive Tim Johns and Micah Kane, CEO of the Hawaii Community Foundation. If successful, the shareholder lawsuits would force the company leaders to pay damages to HECO, essentially contributing personally to the money that might be paid to fire victims through the victim lawsuits.

The company argued there’s no point in pursuing the directors because what they could pay is trivial compared to the overall fire damages.

“We don’t view millions and 10s of millions as trivial amounts,” Robbins said.

Prominent business people usually carry significant personal liability insurance and the lawsuits also demand they repay what HEI paid them.

Although part-time, company filings show board chair Fargo earned $249,500 in 2023, Johns about 130,000 and Kane $117,000. HEI CEO Scott Seu’s salary was $958,833 and HECO CEO Shelee Kimura earned $575,000. Most executives also receive compensation in stock.

“Substantial compensation was paid to people over an extended period of time as directors and officers, and they had the highest duty known to the law to protect the company and its shareholders,” Robbins told Hawaii News Now.

Filings in some of the stockholder cases show the company wants the stockholders’ cases delayed while the Hawaii courts determine HEIs liability to fire victims.

Company lawyers said in one filing that part of the defense in the victims cases is that “officers and directors acted entirely properly, faithfully discharged their fiduciary duties, and truthfully disclosed information about HEI’s safety and wildfire mitigation efforts.”

Hawaiian Electric said it would not comment on the litigation and directors contacted by Hawaii News Now also did not offer responses.