The president of Lansing Grain said his company's situation and that of grain merchant R.F. Cunningham - which filed for bankruptcy June 13 leaving hundreds of agricultural interests owed millions - are "completely unrelated."

Bill Krueger is head of the Okemos, Mich.-based Lansing Grain. His company's Auburn office was opened June 1 by former employees of R.F. Cunningham who had jumped ship shortly before the bankruptcy filing. Krueger said they have been working to help local growers who are out money.

"We've been trading in the area with producers for several years," Krueger said Monday, acknowledging there has been no local office until now. "We have the best interests of the producer at heart."

Cunningham, in addition to the bankruptcy, violated a prompt payment provision of the state's agriculture and markets law, forcing producers to file claims in an attempt to be paid for commodity that's already been delivered.

Cunningham had a $2.9 million loss in 2004 and owes more than $10 million to creditors in several states. Losses to New York producers are estimated to be $1.6 million.

The state's Agricultural Producer Security Fund will mitigate losses if another option, called the Trust Provision, does not cover them. Under the provision, the farmer becomes the one who should be paid first with proceeds of any farm product that the dealer sells. It substantially increases a farm's standing in the case of a bankruptcy.

At a meeting Saturday at Greenfield Farms in Skaneateles, Grieg Dougherty - who worked for Cunningham and now runs the local Lansing Grain office - brought computers and office help. He and his staff had data and documentation about Cunningham's business they provided to growers to assist with the claims, said King Ferry farmer David Smith.

Smith, his brother, Steven, and their business, Log City Milling Inc. are owed $50,000 from Cunningham.

"It was a good meeting, and they are helping," Smith said. "But I think it's somewhat disingenuous. It's really their only option or no one will do any business with them at all. They're trying to repair the damage. They're trying to buy, too. They're being upfront about that."

Bankruptcy papers indicate Dougherty and Richard Domaske, another former Cunningham employee who now works for Krueger, as Cunningham stockholders, knew the company was in trouble. They refused to sign a limited guarantee for a proposed new lender, and then resigned. They opened the Lansing Grain office the next day.

Smith, as well as Jim Greenfield and several other Cayuga County area growers said they felt betrayed by Dougherty and Domaske because they gave no inkling to their customers that anything was wrong. Steven Smith wants the state Attorney General's Office to launch a fraud investigation.

He also faults state Ag & Markets for renewing Cunningham's license in the face of financial instability.

"Most of the people at the meeting were subdued, and they didn't want to complain because they were being helped," Smith said. "But no one was really happy."

Krueger didn't want to comment on Saturday's meeting, he said, because he didn't know about it. Dougherty and Domaske couldn't be reached for comment.

Krueger described Dougherty and Domaske as "very minority owners of the other company." Each of the men own 8.01 percent of Cunningham stock.

The men abruptly leaving Cunningham taking two other employees with them and opening an office for Lansing Grain the very next day -- on the same floor of the Phoenix Building in Auburn - isn't unusual, Krueger said.

"It happens in business every day," he said.

Smith doesn't buy it.

"The whole office staff?" Smith said. He also wanted to know how often a company closes and a new one opens with all of the old company's records.

Smith said he's working to get his money, and welcomes Lansing's help. But it doesn't mean he's interested in selling to them.

"No," he said.

"You need to be careful."

Staff writer Louise Hoffman Broach can be reached at 253-5311 ext. 238 or louise.hoffman@lee.net