How to remove a database server from Utility Explorer
I've recently had to drop a defunct instance from a UCP.
Here's how:

DECLARE @instance_id int;

SELECT @instance_id = mi.instance_id
FROM msdb.dbo.sysutility_ucp_managed_instances AS mi
WHERE mi.instance_name = 'defunctservrname\instancename';

EXEC msdb.dbo.sp_sysutility_ucp_remove_mi @instance_id;