Hawaiian Electric Securities Settlement Approved as Judge Cuts Investor Lawyers' Fee From 30% to 20%

A federal judge in San Francisco approved the $47.75 million Hawaiian Electric securities settlement on October 23, 2026, ending the investor class action that followed the August 2023 Maui wildfires, but she cut the lawyers' fee from the 30% they requested to 20%, or $9.55 million. U.S. District Judge Jacqueline Scott Corley found that the request ran above the Ninth Circuit's 25% benchmark without justification and that the hours behind it were inflated, which moves roughly $4.8 million from class counsel back to the investors who filed valid claims.

The ruling in Bhangal v. Hawaiian Electric Industries, Inc., No. 3:23-cv-04332-JSC, is the third court decision this year to cut or cap what lawyers take from a Maui-fire recovery, after the Hawaii state courts' sliding fee caps in the $4.037 billion wildfire Global Settlement. It is also a pointed reminder to the securities and plaintiffs' bar that a percentage-of-the-fund request is checked against the lodestar, and that a court that ordered a single lead counsel will look hard at billing that reads like a co-lead structure. This account relies on the court-endorsed Class Notice, Hawaiian Electric's SEC filings, the docketed lead-plaintiff order, and contemporaneous reporting on the final-approval and fee order by Bloomberg Law, Law360 and Open Class Actions; the order itself was not publicly posted when this article was written.

What happened with the Hawaiian Electric securities settlement?

Judge Corley granted final approval to the settlement under Rule 23(e), finding the $47.75 million deal fair, reasonable and adequate for the Settlement Class. In the same ruling she decided class counsel's fee and expense motion and the lead plaintiff's request for a service award, and she largely rejected both.

Three things came out of the October 23 order:

• The settlement stands. The $47.75 million fund, paid on behalf of Hawaiian Electric Industries, Inc. (HEI) and the individual defendants, is approved. No defendant admitted wrongdoing, and the case settled before the court ruled on the second motion to dismiss.
• The fee was cut by a third. Counsel asked for 30% of the fund. The court awarded 20%.
• Extras were trimmed. The court denied the $10,000 award sought by lead plaintiff Daniel Warren, approved $133,938.30 in litigation costs for court-appointed lead counsel Pomerantz LLP, and declined to reimburse $43,297.37 in costs claimed by Levi & Korsinsky, LLP.

Open Class Actions reports that a proposed judgment is due November 6, 2026. Once the judgment is entered and any appeal window closes, the claims administrator can begin distribution.

How much is the Hawaiian Electric securities settlement worth?

The gross fund is $47,750,000. Some early reports rounded it to $47.7 million or $48 million, and Pomerantz's own newsletter described it as $47.5 million, but the stipulation, Hawaiian Electric's March 16, 2026 Form 8-K and the court-approved notice all use $47.75 million.

The money comes from a larger package. On December 31, 2025, HEI and the plaintiffs in both the securities case and a parallel shareholder derivative case agreed to a combined $100 million resolution funded entirely by the company's directors' and officers' liability insurance, with $47.75 million earmarked for the securities action. The derivative piece was approved separately by U.S. District Judge Micah W.J. Smith in the District of Hawaii on May 28, 2026.

After the $9.55 million fee, the approved costs, notice and administration expenses and taxes, Open Class Actions estimates that about $37.6 million will remain in the net settlement fund for distribution.

Why did the judge cut attorney fees in the Hawaiian Electric settlement?

The short answer: the request exceeded the circuit benchmark without a reason, and the lodestar cross-check did not support it.

In the Ninth Circuit, courts awarding fees from a common fund under the Common Fund Doctrine can use either the percentage-of-the-fund method or the lodestar method, and they treat 25% of the fund as the "benchmark" percentage. In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir. 2011); Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002). A court may move up or down from 25% based on the results achieved, the risk, the skill required, awards in comparable cases and, as a cross-check, the lawyers' actual lodestar (reasonable hours times reasonable rates). In securities cases, the Private Securities Litigation Reform Act adds a statutory ceiling: total fees "shall not exceed a reasonable percentage" of the amount actually paid to the class. 15 U.S.C. § 78u-4(a)(6). Rule 23(h) requires the court to independently review every fee request.

According to the reporting on Judge Corley's order:

1. No case for going above 25%. The court found counsel offered no justification for exceeding the benchmark, so 30% was off the table at the outset.
2. The lodestar was overstated. Counsel reported a lodestar of about $4.6 million. The court estimated that reasonable, non-duplicative work was closer to $2.5 million. Law360 reported that the judge said counsel had "wildly overinflated" the hours billed, and Open Class Actions reported that the order described the billing records as "questionable at best and fraudulent at worst."
3. A sole-lead appointment was treated as a co-lead case. The court had appointed Warren as lead plaintiff and Pomerantz as sole lead counsel, after Pomerantz's own account shows it had proposed a three-firm leadership structure. The fee order reportedly found that counsel nonetheless staffed and billed the case as though two firms were co-lead counsel, generating the duplicative time the court discounted.
4. The recovery saved the fee from a deeper cut. Open Class Actions reports the court indicated it would have cut further had the recovery for the class not been so substantial. That is why the award landed at 20% rather than at a pure lodestar figure.

The fee arithmetic

Measure	Amount	Note
Gross settlement fund	$47,750,000	Stipulation and 8-K
Fee requested (30%)	$14,325,000	Counsel's motion
Ninth Circuit benchmark (25%)	$11,937,500	Bluetooth; Vizcaino
Fee awarded (20%)	$9,550,000	October 23, 2026 order
Difference, request vs award	$4,775,000	Returned to the net fund
Lodestar as reported by counsel	~$4,600,000	Per reporting on the order
Lodestar the court found reasonable	~$2,500,000	Per reporting on the order
Implied multiplier on reported lodestar	~2.1x	$9.55M / $4.6M (our arithmetic)
Implied multiplier on reasonable lodestar	~3.8x	$9.55M / $2.5M (our arithmetic)

The multipliers are this publication's arithmetic, not findings in the order. They show why the court could cut the percentage while still paying counsel well: even at 20%, the award is several times the lodestar the court thought defensible, which reflects the result counsel obtained for the class after the case had been dismissed once with leave to amend.

Why was the lead plaintiff's $10,000 award denied?

The PSLRA limits what a lead plaintiff may receive. A representative party's share of a recovery must be on the same per-share basis as every other class member, though the court may award "reasonable costs and expenses (including lost wages)" directly relating to the representation. 15 U.S.C. § 78u-4(a)(4). Courts in the Northern District of California regularly require a declaration documenting time actually spent; the reported denial means the court was not satisfied that the $10,000 request met that standard. The denial does not affect Warren's own pro rata recovery as a class member.

Why were Levi & Korsinsky's costs denied?

The order allowed costs only for the firm the court appointed. Levi & Korsinsky appears on the settlement website as class counsel alongside Pomerantz, but the court-appointed lead counsel was Pomerantz alone. Declining $43,297.37 in the second firm's expenses is consistent with the court's finding that the case should not have been run as a co-lead matter: work and costs a non-lead firm incurs without the court's authorization are typically compensable only if lead counsel shows they benefited the class and were not duplicative.

Who is eligible for the Hawaiian Electric securities settlement?

The Settlement Class covers persons and entities that purchased or otherwise acquired HEI common stock between February 28, 2019 and September 4, 2023, inclusive, and were allegedly damaged. The original complaint used a class period ending August 16, 2023, and some claims websites still show that older date; the settlement class period as reported at final approval runs through September 4, 2023. Defendants, their families and affiliates, and anyone who timely opted out are excluded.

Eligibility is not the same as payment. A claimant also needs a positive "recognized loss" under the court-approved plan of allocation. Under the plan, shares sold before August 8, 2023 carry a recognized loss of $0, and later sales are measured against inflation estimates and a statutory 90-day lookback price. A recognized loss that calculates to a negative number is set to zero.

Can I still file a claim in the Hawaiian Electric securities settlement?

No. The deadline to submit a claim form was June 25, 2026. According to the claims administrator's report summarized at final approval, Verita mailed 160,167 notice packets, received 67,472 claims, accepted 24,306 and rejected 43,166, an acceptance rate of about 36%.

High rejection rates are common in securities settlements because many submitted claims involve shares bought outside the class period, sold before any corrective disclosure, or that produce no recognized loss once the plan's formula is applied. A claimant whose claim was rejected for a curable deficiency, such as missing broker documentation, should already have received a deficiency letter; those deadlines generally run before distribution, and the administrator's decisions are subject to the court's final review.

How much will Hawaiian Electric investors get per share?

There is no single per-share payment. Each accepted claimant receives a pro rata share of the net fund, roughly $37.6 million, based on the size of their recognized loss relative to all accepted recognized losses. One claims aggregator, ClaimDepot, has listed an estimated average of about $0.37 per share; that figure is an estimate, not a court finding, and actual payments depend on the final pool of accepted claims.

As a rough scale check, dividing $37.6 million by 24,306 accepted claims gives an average of about $1,550 per claim, but the distribution will be heavily skewed: institutional holders with large recognized losses will receive most of the money, and many retail claimants will receive far less. Plans of allocation typically also set a minimum payment threshold (often $10) below which no check issues.

When will Hawaiian Electric settlement payments be made?

No distribution date has been announced. The sequence from here is: entry of the final judgment (proposed judgment due November 6, 2026); a 30-day window to file a notice of appeal under Federal Rule of Appellate Procedure 4(a)(1)(A); and, if no appeal is filed, a motion by lead counsel for a distribution order approving the administrator's final claim determinations. In comparable Northern District of California securities settlements, that process has taken several months after judgment. An appeal by an Objector or by counsel challenging the fee cut could delay distribution of the settlement fund, although fee appeals are sometimes handled separately so the class can be paid first.

Is the Hawaiian Electric securities settlement part of the Maui wildfire settlement?

No. The Hawaiian Electric securities settlement compensates investors who say they bought HEI stock at inflated prices because the company misstated its wildfire-risk management. It is separate from the $4.037 billion global settlement for the people and businesses harmed by the August 8, 2023 fires in Lahaina and Upcountry Maui, which is administered through the Hawaii state courts. It is also separate from the derivative settlement, which pays money to the company itself, not to shareholders individually.

The three resolutions do share one theme: each court took a hard line on lawyers' compensation.

Proceeding	Court	Recovery	Fee outcome
Securities class action (Bhangal)	N.D. Cal., Judge Corley	$47.75M to investors	30% requested; 20% ($9.55M) awarded on October 23, 2026
Shareholder derivative litigation	D. Haw., Judge Smith	$100M package (D&O-funded)	About $25M in fees approved May 28, 2026
Maui wildfire Global Settlement	Maui Circuit Court, Judge Peter Cahill; Hawaii Supreme Court	$4.037B to about 21,750 claimants	Caps of 3% (most post-settlement retentions), 8.33% (pre-settlement) and up to 10% (trial-set cases), plus a $222M Common Benefit Fund; caps upheld by the Hawaii Supreme Court in early October 2026, with provisions limiting fee appeals struck

In the wildfire case, the Hawaii Supreme Court, in an opinion by Justice Todd Eddins, held that Judge Cahill had authority to cap fees against the 25% otherwise permitted for a Contingency Fee in Hawaii tort cases, while striking provisions that would have blocked lawyers from appealing individual fee awards. For background on that fight, see our earlier coverage of the Maui wildfire attorney fee appeal.

Background: the case and how it got here

Date	Event
August 8, 2023	Wildfires destroy much of Lahaina; HEI shares fall sharply in the following days
August 2023	Bhangal v. Hawaiian Electric Industries filed in the Northern District of California
Lead-plaintiff stage	Court appoints Daniel Warren lead plaintiff and Pomerantz LLP sole lead counsel, denying four competing movants
October 15, 2024	Judge Corley dismisses the complaint with leave to amend
November 12, 2024	Second amended complaint filed, adding Hawaiian Electric Company as a defendant
March 18, 2025	Defendants file a second motion to dismiss; hearing later vacated and case stayed for settlement talks
December 31, 2025	$100M combined securities and derivative settlement agreed, funded by D&O insurance
January 5, 2026	Stipulation of settlement executed
March 3, 2026	Preliminary approval
May 28, 2026	Derivative settlement approved in the District of Hawaii
June 25, 2026	Claims deadline
August 13, 2026	Final approval hearing
October 23, 2026	Final approval granted; fee cut to 20%
November 6, 2026	Proposed judgment due

The complaint alleged that HEI told investors it had adequate wildfire-mitigation and safety protocols, including statements in its 2019 annual report, while leaving Maui exposed to elevated fire risk, and that the truth emerged through reporting after the fires, including a report that the utility had no public safety power shutoff plan. HEI has denied the allegations. The October 2024 order dismissed the original complaint with leave to amend; the case settled before the court could rule on whether the amended pleading cured those defects. That litigation risk is what the court weighed in finding $47.75 million a substantial result.

What it means for plaintiffs' firms, defendants and class members

For securities and class-action plaintiffs' firms. The ruling is a template for how a fee request fails in the Ninth Circuit: ask above 25% without a specific justification, submit a lodestar the court can mark down by nearly half, and staff a sole-lead case as a co-lead case. Firms that informally share work after a court rejects a co-lead structure should expect the non-appointed firm's hours and costs to be treated as unauthorized unless lead counsel can show they were assigned and not duplicative. Contemporaneous, task-level time records are what survive a lodestar cross-check; block entries and parallel review by two firms are what get discounted.

For personal injury and mass tort firms. The same scrutiny is spreading. Judge Cahill's Maui caps, now upheld, rested on the court's inherent power over settlements; the Bhangal order rests on Rule 23(h) and the PSLRA. Different doctrines, same instinct: when a fund is large and the work is concentrated in a short period, courts are willing to look past contingency percentages and ask what the lawyers actually did. MDL Common Benefit Fund assessments face the same lodestar logic.

For defendants and D&O insurers. A fee cut does not change what the defendant pays, since the fund is fixed. It does change claimant recovery and can reduce the risk of objector appeals that delay finality. Defense counsel negotiating combined securities and derivative settlements funded by the same D&O tower may see fee structure scrutinized in two courts at once.

For class members. The fee cut adds about $4.8 million to the net fund, roughly a 14% increase over what would have remained at 30%. Accepted claimants do not need to take any action; payments will follow the court's distribution order. Rejected claimants should check correspondence from Verita for any open deficiency process.

FAQ

What did the court decide in the Hawaiian Electric securities settlement?

On October 23, 2026, Judge Jacqueline Scott Corley of the Northern District of California granted final approval to the $47.75 million settlement in Bhangal v. Hawaiian Electric Industries, cut class counsel's fee from the requested 30% to 20% ($9.55 million), and denied the lead plaintiff's $10,000 award request.

How much did the attorneys get in the Hawaiian Electric settlement?

Class counsel were awarded $9.55 million, 20% of the fund, plus $133,938.30 in costs to Pomerantz LLP. They had sought about $14.3 million. The court declined to reimburse $43,297.37 in costs claimed by Levi & Korsinsky.

Who qualifies for the Hawaiian Electric securities settlement?

Persons who bought or acquired HEI common stock between February 28, 2019 and September 4, 2023, inclusive, who submitted a valid claim by June 25, 2026 and have a positive recognized loss under the plan of allocation.

Is it too late to file a Hawaiian Electric securities claim?

Yes. The claims deadline was June 25, 2026. Of 67,472 claims received, 24,306 were accepted.

When will the Hawaiian Electric securities settlement pay out?

No date has been set. Payments require entry of final judgment (proposed judgment due November 6, 2026), expiry of the appeal period, and a court distribution order.

Does the Hawaiian Electric securities settlement pay Maui fire victims?

No. It pays HEI investors. Fire victims are compensated through the separate $4.037 billion Maui wildfire global settlement in Hawaii state court.