I installed Microsoft Exchange 2010 SP3 on Windows Server 2008 R2 successfully but when I try to expand the Microsoft Exchange On-Premises the initialization fails with the error
Initialization Failed
The following error occurred when retrieving user information for 'Domain\User': The operation could not be performed because Domain\User could not be found.
Initially I thought it to be the issue related to KB982639 but that doesn't seems to fit here, other then this I have no clue to what the issue could be.
Any lead is appreciated.
Well, such issue is probably due to the same SID of the domain machines or the AD/DC and one of the machine or all of the three. For me when I faced this issue the problem was that I cloned all the 3 machines from the VM Template and did not run sysprep properly which caused the conflict. As the AD recognizes the machines from SID it couldn't recognize the machine and this could not retrieve the user information causing the "Initialization Failed".
Solution
Run sysprep on all the 3 machines with generalize option checked. sysprep can be found in C:\Windows\System32\sysprep\. Unfortunately, you have to destroy the current setup you have as you have messed up with the user info in Active Directory.