Young blamed the closure and bankruptcy on a legal dispute between LiveWorld and MyESP, a holding company whose primary asset was Talk City. LiveWorld sued MyESP in January, seeking to collect money it alleged MyESP owed under a purchase agreement, LiveWorld said in a regulatory filing. Young said Talk City couldn't afford the cost or the management distraction involved in continuing the litigation. Prior to being sold to MyESP, Talk City went through several rounds of layoffs, including a 30 percent job cut last year.