Startup Log:
     Starting proftpd: 2014-11-10 17:08:26,390 server4.atwaretech.com proftpd[24369]: mod_auth_file/1.0: unable to use world-readable AuthUserFile '/etc/proftpd/passwd.vhosts' (perms 0644): Operation not permitted
     2014-11-10 17:08:26,390 server4.atwaretech.com proftpd[24369]: fatal: AuthUserFile: unable to use /etc/proftpd/passwd.vhosts: Operation not permitted on line 7 of '/etc/proftpd.conf'
     [FAILED]

Check permissions

root@server4 [~]# cd /etc/proftpd/
root@server4 [/etc/proftpd]# ls -la
total 32
drwxr-x--x   2 root proftpd  4096 Nov 10 17:08 ./
drwxr-xr-x. 89 root root    12288 Nov 10 17:19 ../
-rw-r-----   1 root proftpd   180 Nov 10 17:08 atware
-rw-r-----   1 root proftpd   180 Nov 10 17:08 lennys
-rw-r--r--   1 root root     1180 Nov 10 17:08 passwd.vhosts
-rw-------   1 root root     1501 Nov 10 17:08 passwd.vhosts.cache

Change to owner read writable

root@server4 # chmod o-rwx /etc/proftpd/passwd.vhosts

root@server4 # service proftpd restart

Info: http://ubuntuforums.org/showthread.php?t=2238794