Well, for many of the smaller families their books were closed by order of the commission and never reopened. So they didn't go defunct then and there, but by attrition they eventually died out.
I consider a family going defunct as when soldiers do not report to or kick up to a chain of command. If every soldier in the family is still active in gambling or loansharking or whatever, but operates completely independently and does not kick up to a capo or boss, then I consider that family defunct because the structure and chain of command is dead at that point.