Bankrupt Lehman Brothers Holdings Inc. (LEHMQ) said it settled disputes with Fannie Mae over claims on the defunct firm by agreeing that its reserve amounts for Fannie Mae claims would exceed $5 billion.

Fannie Mae had agreed not to seek priority for about $16 billion in claims, Lehman said in a court filing yesterday.

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net

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