Work around:
# use the following command to switch to VT1 from outside the VM:
VBoxManage controlvm "Ubuntu 16.04" keyboardputscancode 1D 38 3B 9D B8 CB
# inside the VM, log in and then insert # in front of all variable assignments 
as to @michael-thayer above:
sudo nano -w /etc/default/console-setup
# finally reboot
sudo reboot

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https://bugs.launchpad.net/bugs/1443853

Title:
  Ubuntu 14.10 ISO live boot in Oracle VirtualBox ends up with a
  corrupted display

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