AIG slashes debt to Uncle Sam by $25B

American International Group says it has slashed the amount of money it owes the government by $25 billion after moving two subsidiaries into special holding units ahead of their planned spinoffs or sale. The government is receiving $25 billion in preferred shares in the two life insurance companies, American International Assurance Co. and American Life Insurance Co. American International Group Inc., which is based in New York, will continue to hold the common shares in AIA and Alico until it determines whether to complete initial public offerings for the companies or sell them privately. AIG was bailed out by the government last fall at the peak of the credit crisis. It has received an aid package worth more than $180 billion.