We develop and evaluate a rate-allocation multipath algorithm for delivery of video in a Video-on-Demand (VoD) system built upon an overlay network. To evaluate how well the rate-allocation algorithms approach the optimum, we have earlier built a benchmarking system that provides the optimal solution for assigning available bandwidth to delivery paths. This solution is also proportionally-fair. We implement a distributed algorithm for multipath rate allocation that operates based on information collected by overlay nodes. The algorithm is evaluated in the OMNet++ simulation environment and analyzed against the aforementioned benchmarking.