Judge agrees to move wildfire settlement questions to Hawaii Supreme Court

A Maui judge ruled on Friday to allow Hawaii’s Supreme Court to decide over a question that is the holding up the $4 billion wildfire settlement that was first reached a little over a month ago.

Judge Peter Cahill on Maui agreed to ask the state’s Supreme Court questions about how insurance companies can be recouped for money already paid to policyholders, according to media reports on Friday, including the Associated Press.

Last month, Cahill approved a $4 billion settlement with Hawaiian Electric (NYSE:HE) and six other defendants that would resolve lawsuits from hundreds of victims of the Maui wildfires last year. Hawaiian Electric (HE) will pay about $2 billion of the settlement, the utility said last month.

The issue for the Hawaii Supreme Court is that the insurance companies have already paid out more than $2 billion and want to bring separate legal actions against defendants to recoup their claims. Cahill ruled earlier this month that the insurance companies can’t bring their own legal actions, known as subrogation lawsuits.

“The answer of the questions will assist me in making additional decisions,” Cahill said during the two-hour hearing on Friday, according to an account of the hearing by the Hawaii Civil Beat.

Last month, Wells Fargo upgraded Hawaiian Electric (HE) to equal weight from underweight, writing that there’s a high probability that a wildfire settlement moves forward in the coming weeks.

The Wells Fargo analysts wrote that the insurers may be willing to settle for $1 billion to $1.2 billion, or 30%-35% of $3.3 billion estimated insured claims, compared to $600 million reportedly offered initially.