Still trading or already shut down? How to spot a company's operating status before the first contact

Whether a company is still trading or already shut down drives nearly every other deal parameter: the valuation logic (going-concern value vs. liquidation value), whether there are still customer and supplier relationships to take over, whether § 613a BGB applies to the workforce, and how much time pressure the administrator is under.

For a business still trading, the administrator is typically looking for a fast going-concern sale, because every day without a buyer erodes going-concern value further. For a business already shut down, realisation shifts to individual assets — a different pricing logic, a different pool of interested buyers, and often a different pace.

Still trading (going-concern candidate): staff are still employed, the site is open, customers are still being supplied. The administrator keeps the business running provisionally, usually financed via an estate loan or ongoing revenue, until a continuation-or-liquidation decision is made.

Partially wound down: part of the workforce has already been let go, some production lines or sites closed, but a core business keeps running. Often a transitional state shortly before or after the report meeting.

Already shut down: operations stopped, staff dismissed, premises fully or partly cleared. Here the administrator usually realises only individual assets (machinery, inventory, real estate, brand and IP rights) — a different, typically much thinner deal type than an actual business acquisition.

An existing estate loan (Massekredit) is one of the strongest signals: the administrator is taking on extra debt against the estate specifically to fund ongoing operations — nobody does that for a business that's going to be shut down anyway.

Other indicators: the case is running as debtor-in-possession (Eigenverwaltung — management stays in place, a sign of restructuring intent), the report meeting (§ 156 InsO) hasn't happened yet, the company website and social channels are still active, job postings are still open, and recent supplier or customer reviews suggest ongoing operations.

Conversely, mass layoffs (notifiable under § 17 KSchG for larger operations), a closed or inactive company website, a standard insolvency proceeding with no visible estate loan, and a report meeting that already resolved on liquidation all point to a business that's already been wound down.

Another tell: if the filing text or press coverage explicitly talks about "winding down", "realising movable fixed assets" or "dissolution" instead of "continuation" or "restructuring", that's a direct signal of the direction the administrator has already chosen.

A short checklist before you write to the administrator: check the commercial-register extract for current status (dissolution noted?), scan the latest amtliche Insolvenzveröffentlichungen InsO filing for wording like "continuation" versus "realisation", check the company website and recent reviews for activity in the last few weeks, and for corporations check the veröffentlichte Jahresabschlüsse for estate-loan disclosures.

If the status is still unclear after that, a short, direct question to the administrator is the most reliable route — see contacting the insolvency administrator for a structured first outreach. Administrators generally answer a straightforward question about current operating status without friction, since they have no interest in unqualified inquiries either.

For a business still trading, speed matters: the administrator needs a credible offer before going-concern value erodes further, often within a structured bidding process. Prioritise your due diligence accordingly — see the due diligence checklist for the order to check things in, and the timeline from filing to closing for how much time realistically remains.

For a business already shut down, the focus shifts to individual asset valuation — machinery, inventory, real estate, brand and customer-data rights — and negotiations are often calmer, since there's no longer a race against declining going-concern value.