I looked around some and found that kvm-img was an old utility that is
now deprecated. Workaround cd /usr/bin/ && sudo ln -s qemu-img kvm-img
to create a symbolic link. I am not really able to test this in 14.04 as
my trusty install does not have hardware support for virtualization but
if wanted may use a family members computer.

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https://bugs.launchpad.net/bugs/1377487

Title:
  testdrive fails to create a virtual disk when launched from command
  line

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