Good evening folaboss, sorry I'm late in responding but have only just signed in. I think this might help:
On the Accounts & Bills menu, click Categories & Payees .
In the left pane, click Payees .
Click the payee you want to delete.
At the bottom of the page, click Delete , and then click Yes .
Any transactions that were assigned to the deleted payee will not be affected. Deleting a payee just removes it from your list of payees.
It works for me (I use Money 2002) , hope it does for you.