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Hawaiian Electric is speaking with firms that specialize in restructuring
advisory work, exploring options to address the electric utility’s financial and
legal challenges arising from the Maui wildfires, said people familiar with the
matter. 

Hawaiian Electric is facing a selloff in its stock and bonds, and has been hit
with lawsuits alleging that its actions both before and during the wildfires
exacerbated the devastation Maui residents have suffered. 

The company is in discussions over the strategies the company can pursue and to
determine whether it needs to hire legal and financial advisers, the people
said. Hawaiian Electric didn’t respond to requests for comment.

More customer lawsuits are expected in coming weeks to increase the costs of
defending and settling claims for Hawaiian Electric just as its access to
financing is being threatened. 

S&P Global Ratings downgraded Hawaiian Electric’s credit rating to junk on
Tuesday, saying the wildfires destroyed a significant segment of the company’s
customer base and will take many years to restore. S&P also said that wildfire
lawsuits seeking compensation for injuries, deaths and property damage will
weigh on the company’s credit quality.




Lawsuits filed by Maui residents since last week’s blazes have alleged
that Hawaiian Electric failed to shut off its power lines as Hurricane Dora
approached the island despite the risk that high winds could break tree branches
and spark wildfires. 



Official probes into the fires’ origins are expected. Investigators are likely
to consider several possible sources that sparked the blazes, including a
campfire, lightning, transmission equipment and the electrical grid, according
to longtime fire investigators and electrical-grid experts.

Electric utilities can face major consequences if they are deemed to share in
any responsibility for the spread of wildfires. When California utility PG&E’s
equipment was linked to wildfires that swept the state in 2017 and 2018, it used
chapter 11 to forge settlements worth $25.5 billion with property owners,
insurers and other plaintiffs that protected the value of its stock.



Wildfires have led to legal trouble for other West Coast utilities, including
Pacific Power, which was recently found liable and ordered to pay $90 million in
damages to a group of plaintiffs in a jury trial related to a spate of 2020
blazes. Pacific Power, owned by Berkshire Hathaway’s PacificCorp, has disputed
that its equipment sparked those fires and is fighting claims from a broader
proposed class of plaintiffs.

Certain of Hawaiian Electric’s creditors have also been speaking to attorneys
with restructuring expertise, seeking to understand the risks to their
investments, according to another person involved in the discussions.

As of June 30, Hawaiian Electric and its subsidiaries had roughly $3.5 billion
in total debt to banks and bondholders. The company’s bonds due 2037 have
plummeted since the fires, changing hands at 69 cents on the dollar Wednesday,
down from 95 cents last week. Hawaiian Electric stock closed
at $14.57 Wednesday, down by more than half since the wildfires.

Write to Alexander Gladstone at alexander.gladstone@wsj.com




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(Bloomberg) -- Cornell University has decided not to renew a contract to serve
Starbucks coffee, a win for labor organizers’ efforts to make the company pay a
price for shutting down unionized stores.

In May, Starbucks Corp. announced it would close its last two unionized
corporate-run cafés in Cornell’s hometown of Ithaca, New York. It had previously
shuttered the other location that organized. In response, Cornell’s student
government passed a resolution, and activists staged a sit-in demanding that the
university cease serving Starbucks coffee at its own cafés in response to the
alleged union-busting.



“Cornell Dining does not intend to serve Starbucks Coffee in its café venues
after the current agreement with the company expires in 2025,” the school’s vice
president for university relations, Joel Malina, said in an email. The
university will instead consult with the student government on an “inclusive
process” to transition to a new vendor. 

Starbucks didn’t immediately provide comment. The company has denied retaliating
against workers and said that it’s dealing with the union in good faith. The
Ithaca stores were struggling with numerous absences and high turnover,
according to Starbucks. 

Over the past two years, Starbucks Workers United has prevailed in elections at
around 350 of Starbucks’ roughly 9,000 corporate-run US stores, starting with an
initial landmark victory in Buffalo, New York. But none of the unionized stores
has come close to reaching a collective bargaining agreement, and the pace of
the union’s growth has slowed. Organizers have blamed that on alleged
retaliation in the stores and stonewalling at the bargaining table. Starbucks
has accused the union of focusing on “escalating publicity stunts” rather than
contract talks.

Regional directors of the US National Labor Relations Board have issued 100
complaints accusing Starbucks of illegal anti-union tactics, including one
accusing the company of refusing to fairly negotiate at unionized stores across
the country. Another alleges one of the stores near Cornell was shut down “in
large part to discourage unionization efforts in Ithaca and elsewhere.” Judges
and NLRB members have ordered the company to reinstate 28 terminated activists. 




Starbucks has repeatedly denied wrongdoing. At a March US Senate hearing about
the company’s alleged union-busting, former chief executive Howard Schultz said
“we have not broken the law,” and “we do nothing that is nefarious.”




LICENSING AGREEMENTS

Starbucks has licensing agreements that facilitate the sale of its coffee on
many college campuses, as well as other third-party sites such as supermarkets
and hotels. 



Students on other campuses have urged Starbucks be kicked off over the labor
dispute, and last month Starbucks workers held a press conference outside
Philadelphia City Hall urging the city council replace the chain with another
local unionized coffee shop at a city park.

“So far consequences have been extremely limited for Starbucks union-busting,”
said Cornell student activist and former Starbucks employee Nick Wilson. “But if
institutions like Cornell that represent young people and represent more
altruistic values are willing to take a stand, I think that represents a huge
opportunity for workers to gain some leverage.”

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