This bug was fixed in the package qemu - 1:2.6.1+dfsg-0ubuntu4

---------------
qemu (1:2.6.1+dfsg-0ubuntu4) yakkety; urgency=medium

  * retain older xenial machine type to avoid issues starting guests
    created on xenial prior to the SRU for bug 1621042. In that regard the old
    broken xenial machine type and the new fixed one have both to be considered
    as valid LTS machine types (LP: #1626070).

 -- Christian Ehrhardt <christian.ehrha...@canonical.com>  Wed, 21 Sep
2016 14:57:09 +0200

** Changed in: qemu (Ubuntu)
       Status: In Progress => Fix Released

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https://bugs.launchpad.net/bugs/1626070

Title:
  Removal of former release machine types breaks VMs using them

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