Using Migrator for Notes to Exchange (MNE) to migrate a Lotus Notes address book with groups that contain additional groups can not be used to send emails in Outlook.
Within Lotus Notes, an address book can contain groups of users and groups of groups. Once migrated to Exchange the groups with users are able to be used within Outlook, however the nested groups do not work.
This is by design as the address book that contains nested groups do not have an email address and Outlook is unable to reference the groups within a group.
Resolution
Create new groups within Outlook that contain email addresses.