Session3 initialization failed Windows 7

Hi, got a friends dell latitude e5540 which is coming up with session3 initialisation failed on boot up. Have tried dried a windows repair which fails, have also tried a system restore which fails with on the different restore points. I then thought I would open it up and copy the data off, so I could wipe and rebuild the OS. But after I copied the data off I noticed I couldn't open any of the files and within each folder there was a creddb.cef file. I belive this means that the harddrive has been encrypted! Does any have any idea on what I can do to either fix the boot issue or at least get their data off in useable form?

Thanks James