Upgrading from 12.04.3 LTS to 14.04.1 LTS failure

You have to reinstall the update manager. First, remove/purge it:

sudo apt-get purge update-manager-core update-notifier-common

Then have a look at the console output. If it tells you, that some directories could not be removed, delete them manually. In my case:

rm -rf /var/lib/update-manager
rm -rf /var/lib/update-notifier

If you are on 13.04 or later, you should also do this to clear cached update messages:

sudo rm /var/lib/ubuntu-release-upgrader/release-upgrade-available

Then update your sources:

sudo apt-get update

Reinstall the update manager:

sudo apt-get install update-manager-core update-notifier-common -y

Only if you are currently on an LTS and want to upgrade to latest LTS, make sure that in /etc/update-manager/release-upgrades you have set:

Prompt=lts

Otherwise (upgrading any version to a newer version) set:

Prompt=normal

Now dist-upgrade should work:

sudo apt-get dist-upgrade