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During the 2019 wildfire season, one of the worst Maui had ever seen, Hawaiian Electric concluded that it needed to do far more to prevent its power lines from emitting sparks. The utility examined California’s plans to reduce fires ignited by power lines, started flying drones over its territory and vowed to take steps to protect its equipment and its customers from the threat of fire. Nearly four years later, the company has completed little such work, the Wall Street Journal reported. Between 2019 and 2022, it invested less than $245,000 on wildfire-specific projects on the island, regulatory filings show. It didn’t seek state approval to raise rates to pay for broad wildfire-safety improvements until 2022, and has yet to receive it. Now, the company is facing scrutiny, litigation and a financial crisis over indications that its power lines might have played a role in igniting the deadliest U.S. wildfire in more than a century. The blaze has caused at least 110 deaths, destroyed the historic town of Lahaina and resulted in an estimated billions of dollars in damage. The fire’s cause hasn’t been determined, but mounting evidence suggests the utility’s equipment was involved. One video taken by a resident shows a downed power line igniting dry grass along a road near Lahaina. A firm that monitors grid sensors reported dozens of electrical disruptions in the hours before the fire began, including one that coincided in time with video footage of a flash of light from power lines. Hawaiian Electric said that it would investigate any role its infrastructure may have played and cooperate with a separate probe into the fire launched last week by the Hawaii attorney general.

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, WSJ Pro Bankruptcy reported. 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. 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.

Mallinckrodt said on Tuesday that it was preparing to seek bankruptcy protection for the second time in three years after struggling to make a required $200 million settlement payment to opioid victims, Reuters reported. The drugmaker, one of the largest makers of opioids, said that it is negotiating a restructuring support agreement with its stakeholders, while deferring deadlines for missed debt payments and opioid settlement payments to next week. The agreement contemplates a second bankruptcy filing that would result in no recovery for holders of its ordinary equity shares, Mallinckrodt said. The Ireland-based company failed to make scheduled payments to its lenders and opioid creditors in June, and it has sought several short-term extensions of the debt deadlines. Mallinckrodt emerged from bankruptcy last year after winning court approval for a reorganization plan that included a $1.7 billion settlement. It paid the first $450 million of that settlement after emerging from bankruptcy, but it failed to make a $200 million payment due in June. The company on Tuesday said it has reached an agreement to extend the opioid payment due date to Aug. 22.

Lawyers for the Sandy Hook families who won historic defamation damages against the Infowars conspiracy theorist Alex Jones told a federal bankruptcy judge in Houston on Tuesday that Mr. Jones should not be allowed to use his chapter 11 filing to evade $1 billion-plus verdicts made against him, the New York Times reported. The families asked that Judge Christopher Lopez order Mr. Jones to pay them the full damage awards, with no possibility of a trial or a forced settlement over a lesser amount — in legal terminology, to make Mr. Jones’s debts to the families “non-dischargeable” through bankruptcy. If the judge rules in the families’ favor, Mr. Jones would likely be working the rest of his life to pay the debt. Mr. Jones spent years spreading lies that the 2012 shooting that killed 20 first graders and six educators at Sandy Hook Elementary School in Newtown, Conn., was a hoax aimed at gun control. Families of 10 victims sued him for defamation, and in trials in Texas and Connecticut were awarded about $1.4 billion in damages. As the cases went to trial, Infowars declared bankruptcy, and Mr. Jones declared personal bankruptcy late last year. The families have been fighting him in bankruptcy court ever since.

SVB Financial Group, the bankrupt former parent of Silicon Valley Bank, is losing $9 million a month in interest on deposits that were trapped when federal regulators took over the failed bank, a lawyer said yesterday in court, Bloomberg News reported. SVB Financial wants nearly $2 billion in deposits put into a court-controlled account while the holding company fights over the cash with the Federal Deposit Insurance Corp., according to court papers. The agency hasn’t provided a good reason for refusing to make payment on the deposits, SVB argues. The money is key to repaying bondholders owed billions of dollars by SVB Financial. FDIC lawyers have said in court that the defunct bank holding company must apply for the money like any other depositor. As an arm of the US government, the FDIC cannot be forced to pay interest on the disputed cash, Ben Finestone, a lawyer for agency, said yesterday in bankruptcy court.

FTX founder Sam Bankman-Fried allegedly used $100 million in funds he stole from his customers to make political campaign contributions ahead of the 2022 midterm elections, federal prosecutors wrote in a superseding indictment on Monday, The Hill reported. The prosecutors allege that Bankman-Fried embezzled customer deposits to, among other accusations, “help fund over a hundred million dollars in campaign contributions to Democrats and Republicans to seek to influence cryptocurrency regulation.” This comes just days after Judge Lewis A. Kaplan revoked Bankman-Fried’s bail and sent him to jail, saying that there was probable cause to suggest he had attempted to “tamper with witnesses at least twice” since his December arrest. He had previously been under house arrest as he awaits trial over allegations that he defrauded his investors and unlawfully diverted millions of dollars’ worth of cryptocurrency from FTX customers. The new charges in the superseding indictment allege that Bankman-Fried also directed two FTX executives to avoid political contribution limits and conceal where the money was coming from.

Prosecutors in the criminal case against Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, on Monday provided the most detailed account to date of the evidence they plan to use to convict him at trial in October, the New York Times reported. In a 70-page court filing, the prosecutors said they would draw on testimony from some of Bankman-Fried’s closest advisers, as well as an expert witness and other employees of FTX and Alameda Research, a crypto hedge fund he also founded. The prosecutors also said that they planned to use notes that Caroline Ellison, one of Bankman-Fried’s top lieutenants, took after conversations with him, including a memo titled “Things Sam Is Freaking Out About.” And they said that they would introduce a recording of a meeting in which Ms. Ellison told Alameda employees that she had worked with Mr. Bankman-Fried to siphon funds from FTX customers’ accounts. Bankman-Fried, a onetime crypto mogul who built FTX into one of the world’s largest virtual currency exchanges, was arrested in December and charged with orchestrating a sweeping scheme to use customer deposits to finance real estate purchases, charitable giving and donations to politicians. Ellison and two other top FTX executives, Gary Wang and Nishad Singh, have pleaded guilty to participating in the effort and agreed to cooperate with prosecutors. Bankman-Fried faces seven charges of wire fraud, securities fraud, commodities fraud and money laundering. He has pleaded not guilty and is scheduled to go on trial on Oct. 2. Last week, he was sent to jail after the judge overseeing the case revoked his bail over allegations that he was trying to intimidate witnesses.

Hawaiian Electric Industries Co., which supplies roughly 95% of the state’s residents with power, traces its roots back to 1891, just a decade after King Kalakaua met Thomas Edison to see the incandescent light bulb. Now, the utility is facing what’s shaping up to be the biggest-ever test over its future, Bloomberg News reported. In just one day, relentless selling wiped more than a $1 billion from the company’s value as the stock plunged by a third in its biggest loss on record. Investors are dumping shares amid increasing scrutiny over power equipment as the possible source of the deadly Maui wildfire. Analysts are starting to raise questions over whether Hawaiian Electric, one of the smallest publicly traded U.S. utilities, will be able to withstand the pressure if it does end up being at fault. To be clear: no official cause of the fire, which has become the deadliest in the U.S. in more than a century, has been identified. And it could be weeks — even months — before any investigation is finalized. Still, lawsuits have already been filed against Hawaiian Electric amid reports of downed power lines that were knocked over by strong winds in the lead up to the blazes. Damages from the tragedy have so far reached more than $5.5 billion, according to federal estimates, an amount that dwarfs Hawaiian Electric’s market capitalization of about $2.4 billion as of Monday’s close.