Chevron Corp.'s (NYSE:CVX) announcement last week that it's buying Atlas Energy Inc. (NYSE:ATLS) for $4.3 billion seemed like a slam dunk. The oil and gas giant is picking up prime unconventional natural gas properties in the promising Marcellus basin in Appalachia at a time of low commodity prices near premier natural gas markets, and it's getting experienced personnel to run them to boot.

But Chevron will assume more than just promising properties, personnel and $1 billion in debt. It's also taking on Atlas' legal problems as well.

In February, George Zimmerman, a landowner in Washington County, Pa., sued Atlas for polluting his soil and water. Water tests at three locations near gas wells on Zimmerman's property -- one 1,500 feet from his home -- found seven potentially carcinogenic chemicals above "screening levels" set by federal regulators as warranting further investigation, including arsenic, benzene and naphthalene.

"There are substances that can't be made by nature and that's what's in the ground," Zimmerman told Reuters. "I don't want to live here any more. I'm afraid of the chemicals."

Atlas general counsel Jay Hammond has called Zimmerman's claims "completely erroneous" and said the company is in compliance with Pennsylvania's gas-drilling regulations.

Atlas is also facing contractual problems. Alvin and Nancy Christofel, property owners in western Pennsylvania, have also sued Atlas, claiming it's shortchanging them for leases. They say they are entitled to one-eighth of all the revenue from gas leaving their property but they are only getting the percentage based on the amount further down the pipeline, which may be subject to leaks.

"Our checks started out at $900 a month. Then they went down to $700, then $500. Now I don't get enough checks out of two wells to buy four cartons of cigarettes," Alvin Christofel told a local TV station. Atlas wouldn't comment.

But the biggest litigation risk may be looming. In April 2009, Atlas Energy's predecessor company, Atlas America Inc., agreed to buy the 52% of Atlas Energy Resources LLC it didn't own for $500 million in stock. But shareholders of Atlas Energy Resources, including several pension funds, sued Atlas America, alleging the deal grossly undervalued the company -- maybe as much as 30%.

It now looks like the case is going to trial. In a ruling handed down Oct. 28, a Delaware Court of Chancery judge denied Atlas's motion to dismiss the class action filed by Grant & Eisenhofer, saying Atlas America had a fiduciary duty to Atlas Energy Resources shareholders (lawyers for Atlas America argued it didn't). If they win the case, which is expected to go to trial in the first half of next year, the law firm says damages could reach $500 million.

"We believe Atlas unitholders were significantly underpaid," said Michael Barry, one of the Grant & Eisenhofer attorneys leading the case. "The deal has to be entirely fair to the minority unitholders who can't block the deal."

Chevron may have to add $500 million-plus to its acquisition price.