Error trying to compress Hyper-V VM

Error when trying to Compact a Hyper-V virtual machine 

You may receive the error message “The system failed to compact disk.vhd. Error Code: The requested operation could not be completed due to a file system limitation”

When you Shut down the VM, then go to the settings and go to the disk settings and click edit. This will bring up the disk edit wizard and the keep the first selected option, Compact.

Depending on the size of the .VHD file, and the available “white space” within the file, compacting may take a significant amount of time. So be sure to plan your downtime accordingly.

You may receive the error message “The system failed to compact disk.vhd. Error Code: The requested operation could not be completed due to a file system limitation” when attempting to compact the .VHD file.
First, check to see that there are no VSS backups on the VHD by running a “vssadmin list shadows” command in an elevated command prompt.

Second, delete any VSS backups that are present by running “vssadmin delete shadows /all“. If this fails to delete the VSS backups, you may need to resort to the “DiskShadow” utility in WS2K8 and WS2K8R2.