Cannot Add, Remove Or Move Contacts Or Groups In Lync/Skype for Business for Office 365 MSO (16.0xx)

Need help with this issue. We cannot add a any group inside organization it throws an error (see attached) We have aleady re-created SIP folder and deleted contents of tracing folder. Also, user has 60+ groups added has it possibly reached Skype's maximum number of groups that can be added?  Thanks for your help!