Hi,

I just tried, and couldn't reproduce this.  Is your 12.04 system
defaintely uptodate (lxc is, but is the rest?)?  Do you have a custom
apparmor policy you've installed for debootstrap?

You don't show 'sudo' in your command line.  Are you running it as root?
If you weren't, you should be getting an error like:

serge@sergelap:~$ lxc-create -t ubuntu -n backups
This command has to be run as root

Can you re-try the command, and then look through /var/log/syslog for
relevant messages ('sudo grep proc /var/log/syslog')

** Changed in: lxc (Ubuntu)
       Status: New => Incomplete

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https://bugs.launchpad.net/bugs/1013618

Title:
  lxc-create fails when trying to moung proc into chroot

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