This link describes quite nicely how this error is thrown by the JVM:
http://javaeesupportpatterns.blogspot.ro/2012/09/outofmemoryerror-unable-to-create-new.html
Basically it's very dependent on the OS. On RedHat Linux 6.5 (most likely other distros/version and kernel versions) the max_threads=max_process x 2.
The max number of threads is very dependent on the number of allowed processes. Which the max number of processes is dependent on the max physical memory you have installed.
If you have a look in the limits.conf file (on my RHL 6.5 it's in /etc/security/limits.d/90-nproc.conf). Exert form the file:
# Default limit for number of user's processes to prevent
# accidental fork bombs.
# See rhbz #432903 for reasoning.
* soft nproc **1024**
root soft nproc unlimited
You'll see that for non root users it's 1024 (which means 2048 max threads).
To see the max number of threads that your user is allowed to create run this command "cat /proc/sys/kernel/threads-max" or "sysctl kernel.threads-max".
To solve an issue like this (at least it worked for me) as root you'll need to ncrease the max allowed threads:
echo 10000 > /proc/sys/kernel/threads-max
This affects all users and the root. The user needs to log out and then log in again for the settings to take affect.