NTLM dumps core when executed as Domain user

Reproductions Instructions:

1. Install IIS webserver on a Windows 2003 Server machine.
2. Copy any applet (along with the html and class file) to IIS
   webserver staging area, for example to c:\Inetpub\wwwroot
3. Right click on the copied files, select properties -> security tab.
4. Click on the "Advanced" button and uncheck the "Allow inheritable
   permissions from parent to propagate to this object".
5. Click on "Remove" button in the dialog that appears.
6. Click on "Apply" and "Ok" buttons. This removes all the users that
   were added.
5. Execute the below command to access the applet from any other
   windows machine:
   >>java Http -url http://<hostname>/<filename>.html -domain NTLMDOMAIN1

Expected behaviour:
Applet should not be launched. It should give an error saying
'I/O exception while reading: Server returned HTTP response code: 401 for URL: http://<hostname>/<filename>.html'

Actual behaviour:
Core is dumped. A windows error window is popped up saying the JAVA(TM)PLATFORM SE BINARY has stopped working and the program is going to close.