Object Level Recovery error: "Failed to create table <table>. Incorrect syntax near 'COLLA (4251239)

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Title

Object Level Recovery error: "Failed to create table <table>. Incorrect syntax near 'COLLA
Description

When trying to recover a table using LiteSpeed for SQL Server Object level Recovery, the following error is generated.

Failed to create table [database].[dbo].[table]
Incorrect syntax near 'COLLATE'. You may need to set the compatibility level of the current database to a higher value to enable this feature. See help for the stored procedure sp_dbcmptlevel.
Cause

Database's compatibility level is set to SQL 7.0 which does not support the COLLATE command.
Resolution

Change the database's compatibility level to a higher value (e.g. SQL 8.0 or 9.0).

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Object Level Recovery error: "Failed to create table &lt;table&gt;. Incorrect syntax near 'COLLA (4251239)