samba disallows certain network clients/users and crashes

Samba disallows certain network users and crashes. Specifucally, Win7 service (Cobian backup 11) logged on as "local system" user cannot create folders in Samba share while I can manually do so and now crashed as well. This used to work perfectly well and suddenly stopped I assume there must have been a Samba update as I did not update Windows/Cobian machine and regularily update Ubuntu/Samba server.

The Samba 'panic action' script, /usr/share/samba/panic-action,
was called for PID 28333 (/usr/sbin/smbd).

This means there was a problem with the program, such as a segfault.
Below is a backtrace for this process generated with gdb, which shows
the state of the program at the time the error occurred. The Samba log
files may contain additional information about the problem.

If the problem persists, you are encouraged to first install the
samba-dbg package, which contains the debugging symbols for the Samba
binaries. Then submit the provided information as a bug report to
Ubuntu by visiting this link:
https://launchpad.net/ubuntu/+source/samba/+filebug

[Thread debugging using libthread_db enabled]
Using host libthread_db library "/lib/i386-linux-gnu/libthread_db.so.1".
0x00d74416 in __kernel_vsyscall ()
#0 0x00d74416 in __kernel_vsyscall ()
#1 0x010859e3 in waitpid () from /lib/i386-linux-gnu/libc.so.6
#2 0x0100cff3 in ?? () from /lib/i386-linux-gnu/libc.so.6
#3 0x00563e0b in smb_panic ()
#4 0x00552f82 in ?? ()
#5 <signal handler called>
#6 0x0110482e in ?? () from /lib/i386-linux-gnu/libc.so.6
#7 0x00d3a45b in ?? () from /usr/lib/i386-linux-gnu/libtdb.so.1
#8 0x00d3acd2 in ?? () from /usr/lib/i386-linux-gnu/libtdb.so.1
#9 0x00d3565c in ?? () from /usr/lib/i386-linux-gnu/libtdb.so.1
#10 0x00d3593c in ?? () from /usr/lib/i386-linux-gnu/libtdb.so.1
#11 0x00d3600e in ?? () from /usr/lib/i386-linux-gnu/libtdb.so.1
#12 0x00d3665f in tdb_delete () from /usr/lib/i386-linux-gnu/libtdb.so.1
#13 0x0054bdd1 in ?? ()
#14 0x001dca29 in session_yield ()
#15 0x001e12cd in invalidate_vuid ()
#16 0x001e13c0 in invalidate_all_vuids ()
#17 0x0082978a in ?? ()
#18 0x00829bee in exit_server_cleanly ()
#19 0x0025473d in ?? ()
#20 0x00578b27 in tevent_common_check_signal ()
#21 0x00575e2a in run_events_poll ()
#22 0x0025ad83 in smbd_process ()
#23 0x00829540 in ?? ()
#24 0x00576166 in run_events_poll ()
#25 0x0057631b in ?? ()
#26 0x005770e8 in _tevent_loop_once ()
#27 0x001c87d4 in main ()
A debugging session is active.

 Inferior 1 [process 28333] will be detached.

Quit anyway? (y or n) [answered Y; input not from terminal]
---
ApportVersion: 2.0.1-0ubuntu17.2
Architecture: i386
DistroRelease: Ubuntu 12.04
MarkForUpload: True
Package: samba 2:3.6.3-2ubuntu2.6
PackageArchitecture: i386
ProcEnviron:
 TERM=xterm
 PATH=(custom, no user)
 LANG=en_GB.UTF-8
 SHELL=/bin/bash
ProcVersionSignature: Ubuntu 3.2.0-42.67-generic 3.2.44
SambaServerRegression: Yes
SmbConfIncluded: Yes
SmbLog:
 failed to retrieve printer list: NT_STATUS_UNSUCCESSFUL
   failed to retrieve printer list: NT_STATUS_UNSUCCESSFUL
   failed to retrieve printer list: NT_STATUS_UNSUCCESSFUL
   failed to retrieve printer list: NT_STATUS_UNSUCCESSFUL
Tags: precise
UbuntuFailedConnect: Yes
Uname: Linux 3.2.0-42-generic i686
UpgradeStatus: Upgraded to precise on 2012-06-06 (341 days ago)
UserGroups: