UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) November 15, 2005

PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2

(Exact name of registrant as specified in its charter)


Texas	0-13518	75-1933081
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

751 Broad Street, Second Floor Newark, NJ		07102 (Zip Code)
(Address of Principal Executive Offices)

(973) 802-6000

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02 Termination of a Material Definitive Agreement

As previously reported, on November 4, 2005 Prudential-Bache/Watson & Taylor, Ltd.-2 (the “Partnership”) entered into a Real Estate Purchase and Sale Agreement (the “Sale Agreement”) with Recycland, LLC (the “Recycland”) for the sale of the Partnership’s sole remaining property, Hampton Park, located in Capitol Heights, Maryland, which site is the subject of an environmental remediation plan approved by the Maryland Department of the Environment.

The Sale Agreement provided that Recycland would pay approximately $3,200,000 to the Partnership, taking into account anticipated offsets under the Sale Agreement for the cost of a pollution legal liability insurance policy covering certain environmental liabilities and the cost of a “fixed price to closure” contract with Gannett Fleming Project Development Corporation and EMG Corporation to complete the environmental remediation work through and including the issuance of a Certificate of Completion by the Maryland Department of the Environment. The Sale Agreement provided that Recycland would continue the remediation work and indemnify the Partnership for certain environmental liabilities and performance obligations. Pursuant to the Sale Agreement, Recycland had an opportunity to conduct due diligence and to terminate the agreement for any reason until one business day before closing.

On November 15, 2005, Recycland terminated the Sale Agreement in accordance with sections 4.5 and 13.4 of the Sale Agreement.

In light of the termination of the Sale Agreement and other information, the managing general partner of the Partnership believes that the Partnership’s liquidation will not be completed by December 31, 2005. The managing general partner is in the process of analyzing the current facts and circumstances to ascertain its best estimate of the Partnership’s liquidation date and future liquidating costs. The managing general partner expects to announce its best estimate for a liquidation date and future liquidating costs prior to December 31, 2005.

Certain statements and information included in this Form 8-K constitute forward-looking statements within the meaning of the federal securities laws and regulations. These forward-looking statements are based on current expectations, estimates and projections about future events, including but not limited to, the sale of property. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, net value per unit, performance or achievements of the Partnership to be materially different from any future results, net value per unit, performance, or achievements expressed or implied in such forward-looking statements. These factors include, but are not limited to, the following: whether the property is sold and the terms of conditions of any sale, the amount of expenses related to the sale and the reservation of amounts to pay for contingencies. The Partnership disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Although the Partnership believes its current expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Partnership can give no assurance that expectations will be attained or that actual results will not differ materially from those set forth in the forward-looking statements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.


	PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2 (Registrant)
Date: November 21, 2005	By:	Prudential-Bache Properties, Inc., a Delaware Corporation, managing general partner
	By:	/s/ Warren S. Hoffman
		Warren S. Hoffman Chief Financial Officer and Vice President

PRUDENTIAL BACHE WATSON & TAYLOR LTD 2 8-K