(Reuters) -Hawaiian Electric's shares jumped more than 40% on Monday after the electric utility said it was not responsible for the recent wildfires in Maui and that power lines had been shut for hours prior to the deadly blaze that devastated the island.
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," Hawaiian Electric CEO Shelee Kimura said in a statement.
The company's shares have been volatile since the Aug. 8 wildfires. They closed at $13.97 on Monday after at least two trading halts during regular trading hours. Even with Monday's rally, shares are still down more than 60% since the wildfires.
About 58 million of the company's shares changed hands on Monday, hitting their record trading volume.
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."
"To the extent HECO (Hawaiian Electric Co) has information of a second ignition source, HECO should offer that evidence now. The ultimate responsibility rests with HECO to de-energize, ensure its equipment and systems are properly maintained, and ensure downed power lines are not re-energized," said John Fiske, an attorney representing the county of Maui in the lawsuit.
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.