first define « fails ». what do you see, what do you expect?
run this
/sbin/e-smith/audittools/templates
this will list you all custom template fragments you have
after a migration we really encourage you to remove ALL your custom template fragments and only add back those which are essential for you after testing without.
hence i suggest, after listing those templates, doing :
mkdir /root/templates-custom
mv /etc/e-smith/templates-custom/* /root/templates-custom/
signal-event post-upgrade
signal-event reboot