Thousands of checks are scheduled to be mailed to thrift depositors around the world Wednesday and Thursday, distributing part of the $29 million cash portion of a settlement between depositors and the state.

When the $29 million is actually received Wednesday from the state and its former insurance carrier, between 12,000 and 14,000 checks will be mailed to depositors in Utah, 49 other states, nine foreign countries and two territories, officials said.Depositors have volunteered to stuff envelopes for the massive mailing in the downtown office of the Arthur Andersen & Co. accounting firm, which is handling the distribution.

Meanwhile, a 3rd District Judge, who previously awarded depositors' attorneys $5.8 million for their work on the case, has issued another ruling that says attorneys should bear more of the litigation expenses and ordered that $1.9 million of the legal fees be held in reserve until the legal battle is over and expenses are determined. That could mean more money for depositors, if any expenses are charged to attorneys.

The initial settlement payment, officials said, will mean all 15,000 depositors will have received at least 72-73 percent of the money they had in five thrift and loans before the state froze deposits at the institutions on July 31, 1986, then later ordered them liquidated.

Depositors filed a class-action lawsuit against the state to recover their lost savings, alleging the state and thrift industry officials committed fraud and negligence in handling the troubled thrifts.

The $29 million distribution is just part of the settlement agreement lawmakers passed last October to return depositors about 98 percent of their money. An ongoing liquidation of thrift assets has returned a total $42 million to depositors already, $17 million more is anticipated from the liquidation and the state will loan $15 million more to loan depositors, which will be paid back with liquidation proceeds.

Depositors will not get the entire $29 million nor will all depositors get a check from this distribution.

Depositors whose accounts haven't been reconciled or who have already received 73 percent or more of their money through previous distributions from the liquidation won't get a check.

Another distribution will take place in early January, the accounting firm said, for money left after expenses are paid and to depositors whose account balances are under dispute.

And for those depositors who do get a check this first time, attorneys' fees and other costs have been subtracted from the total.

Third District Judge David S. Young has ruled that depositors' attorneys will initially receive $3.9 million of the $5.8 million they will make in the settlement. The remaining $1.9 million or 33 percent will be held in reserve until the court makes a final determination of expenses and depositors' legal counsel has completed all matters in the case.

This follows a preliminary review of the expenses, in which "the court has concluded that a substantial portion of the costs and expenses of the litigation should be borne by the plaintiffs' attorneys," the order said.

Young's recent ruling on the attorneys' fees amends an earlier order that provided just 10 percent of the attorneys' fees be set aside until all of the depositors' legal matters are resolved. Depositors plan to file additional claims against accountants and attorneys who advised the failing thrifts before the industry collapsed.

In addition to holding a portion of the attorneys' fees in reserve, Young also ordered that another $4 million also be set aside to cover depositors' costs.

Among those costs is $298,313 to be returned to depositors who contributed to the legal war chest that financed the litigation. Checks were mailed with the first distribution to reimburse those contributions.