Hyper-v backups fails with Failed to backup VM MYMV (4038268)

In the system Event log we see:

“The shadow copies of volume D: were aborted because the shadow copy storage could not grow due to a user imposed limit”

From binary log:

Error   2015/03/05 16:39:48   70   Data Plugin   HOST01   Failed to backup VM VMFS01
Error   2015/03/05 17:07:49   70   Data Plugin   HOST01   Failed to backup VM VMVAULT

Hyper-V trace extract
0   FILESYS   ???   3688   6   21   170742514793   Failed to read: The device is not ready.
0   HV_BU   ???   3688   23   0   170742514793   Failed to read from file d:\hyperv_apm_working_dir\vmvault\im\vss_expose\\d\hyperv\vmvault01\vmvault-d.vhdx
0   VSSBACK   ???   3688   118   0   170749776714   Problem deleting snapshots, 0 snapshots remaining
0   VSSBACK   ???   3688   119   0   170749776714   Failed with error -2147212536
0   HV_BU   ???   3688   35   0   170749777715   MAS cleanup workingdir D:\HyperV_APM_Working_Dir
2   HV_UTIL   ???   3688   50   0   170749777715   Attempt deleting file '\\?\D:\HyperV_APM_Working_Dir\VMVAULT\im\bkbtemp\recover_ctx.dat'
0   HV_UTIL   ???   3688   47   0   170749778713   Directory \\?\D:\HyperV_APM_Working_Dir\VMVAULT\im\vss_expose\D cannot be opened