Hawaiian Electric Industries Inc. shares plunged as much as 42% during Aug. 14 trading under the threat of a class-action lawsuit in the wake of wildfires that ravaged Maui, killing nearly 100 people across the island and damaging 2,207 structures in Lahaina alone.

As of Aug. 13, the utility had restored power to 60% of customers that lost electricity Aug. 8 when the fires began and continues to restore service to an additional 5,000 customers facing outages, according to a statement. Hawaiian Electric owns Maui Electric Company Ltd., which serves about 70,000 customers on Maui, Lanai and Molokai. The death toll from the fire stood at 96, as of an Aug. 13 update from the Maui County government.

Wells Fargo, Guggenheim and Morningstar have all lowered their Hawaiian Electric stock price targets since Aug. 11 due to the damage and potential liabilities.

Attorneys from three firms in California and Hawaii filed a complaint Aug. 12 with the Oahu District Court alleging that Hawaiian Electric equipment "foreseeably ignited the fastmoving, deadly, and destructive Lahaina Fire."

The utility should have de-energized power lines after the National Weather Service issued a red flag warning and "knew that their electrical infrastructure was inadequate, aging, and/or vulnerable to foreseeable and known weather conditions," the complaint said.

While Hawaii does not have inverse condemnation laws that assign liability to utilities that cause wildfire damage regardless of fault, as is the case in California, Morningstar lowered its price target for Hawaiian Electric to $23 per share from $34 on Aug. 14, citing "numerous press reports over the weekend that suggest Hawaiian Electric's equipment may have been responsible for the recent Lahaina fire in the utility's service territory."

Although the burden falls on plaintiffs to show negligence, "the loss of the market's confidence is a key near-term concern and will likely remain elevated for many years," they added.

Analysts at Guggenheim agreed, emphasizing that Hawaiian Electric is at risk for a reorganization.

"Looking forward, we see a potential for the current company structure to change materially including partial asset buy-outs or government intervention (i.e., utility municipalization)," they told clients Aug. 14. "In other words, given the size of the utility and the potential liabilities in front of it, it's hard for us to imagine if the company will emerge from this tragic incident in its current form."

According to Hawaiian Electric management, "property and liability insurance coverages ... will protect the company against wildfire-related damages to its properties as well as wildfire-related claims made against it by third parties," Evercore ISI told clients Aug. 11, adding that "overhead and underground [transmission and distribution] systems, with the exception of substation buildings and contents, are uninsured unless those systems are located within 1,000 feet of a Hawaiian Electric-insured location (i.e. generating facility or substation)."

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