Network drive - Backup keeps cancelling

I upgraded from BE12.5D to 2012 (fully updated). I have a network share which was setup in 12.5 and the backup was created succesfully. In 2012 the backup keeps cancelling saying the folder is offline. The share was created in 12.5 using the \\server\folder notation and the permissions were set to everyone can read/write. When I try and do an Inventory & Catalog I get the following error:

Inventory Device 00003 -- The job failed with the following error: Physical Volume Library Drive or Robot paused, offline, or disabled.

The KB article doesn't shed any light on the problem. The folder is listed as "online" in 2012 even when the job starts.