What is the best way to deal with a plan-owned legal entity (LLC) that has no value? We'd like to terminate the plan, but really don't know how to deal with this interest. Can we divide that membership interest up by creating individual membership interests for the participants and then distribute "in-kind"? Or would it be better to dissolve the entity completely? I really have no clue here.

From the perspective of the Plan and the Plan fiduciaries, I like the in-kind distribution of LLC ownership interests. You do have to value it, but at least there is nothing that is being walked away from by Plan trustees or taken by a potential party in interest in dealing with the plan as part of the LLC's dissolution.

Is anything being done to terminate the LLC? Is there any reason to NOT terminate the LLC?