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Permission Inheritance

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I have an issue setting permissions on a folder. I am migrating a system from a WinSVR2003 box to a WinSVR2008R2 box. There is a folder on a share named \\Reports32\Hospitals. Within the Hospital folders are Crystal Report files that different hospitals will need to access. Each Crystal Report file will need separate permissions for each hospital. User from each hospital will reside in a security group and that group will be applied to each file. One hospital should not be able to access the other hospitals report.

Permissions for the CR File on the existing system




Here are the permissions on the folder.



On the new machine I'm attempting to mirror these permissions. I must first remove the inheritance of Everyone from the Reports32 folder.




It won't allow this.  I tried working from the file back out to the folder but it will not allow me do do that either.

I'm new at this and I did not setup the original system. I've read allot of posts but can't seem to find anything with the same situation.

Can anyone offer any help? Thank you in advance.

David








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