Over $1.1 billion sitting in a Bank of America trust account could begin flowing to Maui wildfire victims in July or August as the first of four annual settlement payments three years after the deadly disaster.

The linchpin allowing for the long-awaited distributions from the $4 billion settlement was a mediated agreement approved in April resolving issues with insurance companies.

A few other loose ends, including a decision Friday on fees for attorneys representing plaintiffs, have now been cinched up to define the pot available for division amongst those who suffered losses and allow court-appointed claims administrators to start making payment determinations for acceptance by victims, followed by initial payments starting in July or August.

“We’ve had a lot of issues, and I’m very pleased that we’re finally at this point,” said Maui attorney Cynthia Wong, one of several lawyers serving as liaison counsel to a brigade of attorneys representing thousands of plaintiffs. “It’s compensation that we achieved within one year of the (fire) and we’ve been fighting over that money for the last year-and-a-half.”

Because of the sheer volume of claims, administrators anticipate it could take six months to process and pay out the entire first installment of settlement proceeds.

As of mid-April, there were 94,816 claims filed by 21,750 claimants in the mass-tort litigation stemming from the Aug. 8, 2023, disaster that killed 102 people and destroyed most of Lahaina, including around 5,500 homes, businesses, government buildings and other property.

A fire that same day that destroyed about 20 homes in Upcountry Maui.

The fires were attributed to gale-force winds that downed electric utility lines and ignited dry vegetation on public and private lands before quickly overrunning much of the historic West Maui town.

Several entities blamed for the disaster — Hawaiian Electric Co., the state, Kamehameha Schools, Spectrum Oceanic LLC, Hawaiian Telcom and affiliates of West Maui Land Co. — agreed in August 2024 to settle all litigation with victims for $4 billion.

But because more than 160 insurance companies didn’t agree and were trying to recover claim payouts they made to customers from the settling parties in separate litigation, finalizing the settlement was subject to having potential recovery by insurers extinguished.

Two Hawaii Supreme Court decisions in February 2025 and February of this year blocked avenues insurers were pursuing to obtain payments from settling parties. But a third related case was still on appeal at the Hawaii Intermediate Court of Appeals in March when a resolution was reached between attorneys for insurers and attorneys for fire victims with a mediator’s help.

Cut for insurers

Under the arrangement, insurers will receive 10% of normal insurance claim payouts to customers and 15% of claim payouts on certain policy exceptions that got covered. Based on insurance claim payment data filed in court, insurers expect to receive $249 million back on nearly $2.2 billion in paid claims.

This cut, taken out of settlement proceeds for victims who received insurance payouts, is to be parceled out from the second, third and fourth annual settlement installments and not from the initial distribution.

Wong said the agreement was crucial for two big reasons. One was having the pending appeal withdrawn instead of having it possibly reach the Hawaii Supreme Court after a decision by the intermediate appeals court.

“They were going to delay things even further if we didn’t strike the agreement,” she said. “That was a huge motivating factor.”

Another critical factor was preventing insurers from trying to claw back insurance payments directly from victims in a process that involves filing a lien against the settlement proceeds of customers.

Wong said settlement payouts would have been subject to liens being resolved in court before going to victims if the deal with insurers hadn’t been made.

“They (insurers) have the right to assert the full amount of their lien against their insureds,” she said. “And then we would have to go through lien hearings. And then, when you go through a lien hearing, if either side is not happy with the decision, then it would be subject to an appeal. And so, the victims could be dragged out for a long time if we didn’t come to some kind of resolution.”

Peter Cahill, the state Circuit Court judge on Maui handling the case, had appointed a committee in early 2025 to explore opportunities for both sides to resolve the dilemma with insurers but rejected competing proposals made in January, according to a court filing.

Cahill described the 2024 tentative $4 billion settlement in a recent order as a vessel that “launched itself on a meander that emptied into a swamp of Stygian proportions,” referencing a very dark place or river for ferrying the dead to the underworld.

According to Wong, a breakthrough in reaching an agreement with so many insurance companies occurred after negotiations with one insurer, locally owned Island Insurance, which agreed to terms later reflected in the broad agreement.

“We had one local carrier that was willing to go out on a limb, basically, and wanted to break the barrier and not be a part of the band of insurance companies that were continuing their appeals,” Wong said.

The solo arrangement led Cahill to push the two sides again to work on a broader deal with help of mediator Keith Hunter of Honolulu-based Dispute Prevention &Resolution Inc. That effort resulted in the broader deal reached in February and approved in April.

Still, every insurance company had an option to participate or not, and Wong said every one opted to be part of the deal before a May deadline. Individual plaintiffs also had the same option, and very few opted out, she added.

After the lien resolution was approved, defendants in the case began to deposit their share of the first-year obligation that added up to $1,139,453,012.

Fee decisions

Cahill on Friday decided how much of the $4 billion settlement can go to attorneys representing plaintiffs.

Some attorneys had requested the 25% maximum allowed under state law for such cases. Other attorneys didn’t agree with that figure and asked the court to consider basing fees on the level of work done and other measures.

Cahill decided on a general fee ranging from 3% to 10%, with 3% applying to most attorneys who were retained after Aug. 19, 2024, and up to 8.33% for most attorneys retained after that date. A handful of attorneys whose cases were heading to trial before the settlement are eligible for up to 10%.

In extraordinary circumstances, attorneys may seek a little more, but no higher than 12.5%, at the discretion of Cahill and subject to a hearing.

The fee percentage applies to each plaintiff’s settlement amount and is roughly estimated to total $200 million, or 5% of $4 billion, and will be paid out in equal parts annually over four years.

An additional $222 million was set aside by Cahill for allocation amongst attorneys who did work that benefited all plaintiffs. This fee is to be paid out in the second, third and fourth years of settlement distributions after determinations made by a review board that includes two retired judges.

Wong had expected Cahill to give much weight to maximizing the amount for victims and called his fee decision difficult and fair.

“He cares very much about Maui, and he’s made that clear from day one,” she said.

Gov. Josh Green on Saturday called Cahill’s decision on attorneys fees a victory for survivors and their families.

“By placing reasonable limits on attorney fees, the court has helped ensure that more settlement funds will go directly to the people and communities who were harmed,” he said in a statement.

More costs

Reimbursing law firms for expenses representing victims is expected to cost up to $78 million, or about 2% of the $4 billion settlement, pending review board determinations, according to another ruling Friday by Cahill.

One consortium of four firms, led by Maui-based Apo Reck &Kusachi representing 3,496 Maui wildfire claimants, advised the court that it expects it will have spent $22.2 million working on the case through 2028, with expenses covering things that include expert reports, case management and a team of 11 attorneys and 90 support staff.

Another cut of the settlement authorized by Cahill Friday was $25 million for Maui County to be paid in the fourth annual distribution.

There are also expenses to help the court administer the settlement. This work, which as of January had cost $6 million, is being done by Hunter and three other special masters, a claims processing firm and consultants whose work has included establishing a plaintiff database, assisting claimants without attorneys, managing claim-related documents, guarding against fraud, evaluating claims and determining claim payment amounts.

Claim
determinations

According to an April report from the special masters, claims-processing firm BrownGreer PLC anticipates that it will take about six months to render initial findings for all filed claims.

Wong said her expectation is for initial claim payments to start being awarded in July or August and continue for six more months. Administrators have grouped claims into 10 categories, but circumstances for each claim are often unique.

Of the 94,816 claims from 21,750 claimants, 3,804 are for personal injuries and 327 are for wrongful death.

There are also 7,319 business loss claims, 5,894 claims for losses of real property that include homes, 16,203 claims for personal property losses and 8,189 claims for lost wages.

In addition, there are 17,050 claims for being displaced, 12,715 claims for living expenses, 16,472 claims related to harm suffered by being in the fire’s “zone of danger,” and 6,843 claims for other kinds of damage.

The $4 billion won’t come close to compensating for all losses, though Maui County is trying to offset some of that using a $1.6 billion federal grant it began administering last year.

The settlement total was agreed upon with help of mediators based in part on what amount could be paid or force a defendant into bankruptcy in relation to their share of responsibility.

Of the total, about $2 billion is to come from Hawaiian Electric, $873 million is to come from Kamehameha Schools, $808 million is to come from the state, and about $300 million is to come from Spectrum Oceanic LLC, Hawaiian Telcom and affiliates of West Maui Land Co.

Most or all settlement payers previously contributed $175 million to a victim-compensation fund led by the state — the One ‘Ohana Fund — which has already paid 79 personal injury or death claims totaling $111.5 million. Victims receiving One ‘Ohana proceeds may still receive a share of the settlement if their losses exceed what was covered by the state-led fund.

One ‘Ohana was designed to give some fire victims quicker compensation for losses, though the first tranche of settlement payouts is now near.

“It’s been a long road for the victims, and it’s definitely going to be a happy day when the victims start to receive their compensation,” Wong said. “It’s very difficult on Maui, and it’s been very difficult on Maui for a long time.”

Cahill, in one of his orders filed Friday, added, “This Court admits the profound disappointment in its inability to bring relief to all our fire survivors, their families, and those of the deceased sooner rather than later. Now, the time has come when that may occur.”