(Reuters) -Hawaiian Electric’s shares jumped nearly 40% on Monday after the electric utility disputed accusations that its power lines caused the deadly wildfires in Maui earlier this month.
Maui County sued Hawaiian Electric last week, accusing the utility of negligently failing to shut off power and causing the devastating fires that destroyed the coastal town of Lahaina and killed more than 114 people.
Hawaiian Electric said its power lines were responsible for the earlier of two fires in Lahaina, but said the town was gutted by a different fire which started later in the afternoon and could not be contained by the county’s fire department.
“We were surprised and disappointed that the County of Maui rushed to court even before completing its own investigation,” CEO Shelee Kimura said in a statement.
The company’s shares have been volatile since the Aug. 8 wildfires. They were trading at $13.48 on Monday after at least two trading halts since markets opened. More than 42 million shares changed hands on Monday, nearly surpassing a record of 45 million hit on Aug. 17.
The utility said its power lines in West Maui had been shut down for more than six hours before the afternoon wildfires started in the area, calling the lawsuit filed against it by the county of Maui “factually and legally irresponsible.”
The company is trying to defend itself as investors fear the possibility of bankruptcy, which hinges on Hawaiian Electric’s legal arguments, Raymond James analyst Pavel Molchanov said.
“Ultimately this will need to be done in court rather than simply via press releases,” he added.
Some analysts also view the lawsuit as an attempt by the county to blame the utility rather than term the fire a weather-induced tragedy.
(Reporting by Deep Vakil, Arunima Kumar and Mrinalika Roy in Bengaluru, Editing by Louise Heavens, Mark Potter, Shounak Dasgupta and Maju Samuel)
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