In this paper, a distributed path planner is presented based on a hierarchical control structure for a virtual vehicle system. The high-level planner cooperates closely with lower level planners to determine the shortest path for the virtual vehicle. The computation task is distributed among all the mobile robots to achieve better load balancing and efficient use of available computational resources. Moreover, a dynamic environment is considered in the path planner. With prior knowledge about the environment, the planner efficiently adjusts the original planned path and generates a new collision-free path when the sensor readings in the mobile robots report that a new obstacle has been detected. A virtual structure for a rigid-body transportation system that employs a large number of robots to lift a rigid body and transport it to a user specified location is presented along with the distributed path planner.