This issue can occur if you are migrating an organisation from Exchange 2007 to Exchange 2010 and this organisation had previously been migrated from Exchange 2003.

Public folders refuses to replicate from Exchange 2007 to Exchange 2010. Following error is recoded in Application Logs on Exchange 2010:

Level: Error
Source: MSExchange Store Driver
Task Category: MSExchangeStoreDriver
Description:
The store driver couldn’t deliver the public folder replication message “Folder Content (PublicFolderDatabase@domain.com)” because the following error occurred: The Active Directory user wasn’t found..

Solution

Warning: Incorrectly using ADSI Edit can cause serious damage to your Active Directory! Make sure you know what you are doing, perform full Active Directory backup and proceed at your own risk!

Issue is caused by an empty legacy CN=Server container in Active Directory Structure left from old Exchange 2003 installation. More info here.

Open ADSI Editor and navigate to: Configuration> Services > Microsoft Exchange > [organization_name] > Administrative Groups > [legacy administrative group] > Servers

• Make sure Servers container is empty!
• Make sure you don’t have any Exchange 2003 servers in your AD Forest!

Delete Servers container.