That was a red herring, actually.  The cause of failure appears to be
the next line.

After fixing that so that the mkdir succeeds, it still fails on

Failed to allocate manager object: No such file or directory

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https://bugs.launchpad.net/bugs/1514690

Title:
  rebooting container with systemd >= 226 fails to create /lxc/adt-
  xenial/init.scope control group

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