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~~May 1524, ~~2005~~2007

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)

751 Broad Street, Second Floor

Newark, NJ

07102

(Address of Principal Executive Offices)

(Zip Code)

(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 12.0201 ~~Termination~~Completion of aAcquisition ~~Material~~or ~~Definitive~~Disposition ~~Agreement~~of Assets

As previously reported, on ~~November~~March 427, ~~2005~~2007 the Prudential-Bache/Watson & Taylor, ~~Ltd~~LTD.-2 (the “Partnership”) entered into a ~~Real Estate~~ Purchase and Sale Agreement (the “Sale Agreement”) with ~~Recycland~~Eric G. Meyers, ~~LLC~~John ~~(the~~P. ~~“Recycland”)~~Kyle, and Terry North, or their assignee for the ~~sale~~purchase of the Partnership’s ~~sole remaining property,~~ Hampton Park Property, a mini-storage and office/warehouse facility located in Capitol Heights, Maryland,. ~~which~~The ~~site~~purchasers isassigned ~~the~~their ~~subject~~rights ofunder anthe ~~environmental~~Sale ~~remediation~~Agreement ~~plan~~to ~~approved~~9244 byEast ~~the~~Hampton LLC, a Maryland ~~Department~~Limited ofLiability Company (the ~~Environment~~“Purchaser”).

~~The~~On ~~Sale~~May ~~Agreement~~24, ~~provided that Recycland would pay approximately $3~~2007,~~200,000~~ to the Partnership, ~~taking~~completed ~~into account anticipated offsets under~~ the ~~Sale~~sale ~~Agreement for the cost~~ of ~~a pollution legal liability insurance policy covering certain environmental liabilities and~~ the ~~cost~~Hampton ofPark aProperty ~~“fixed price to closure” contract~~ with ~~Gannett Fleming Project Development Corporation and EMG Corporation to complete~~ the ~~environmental~~Purchaser ~~remediation~~for ~~work~~approximately $3,200,000, ~~through~~in ~~and~~accordance ~~including~~with the ~~issuance~~terms 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~~At 15closing, ~~2005,~~the ~~Recycland~~Purchaser ~~terminated~~entered into a services agreement with ATC Associates Inc. (“ATC”) to carry out the ~~Sale~~environmental ~~Agreement~~work specified in ~~accordance~~the ~~with~~plan ~~sections~~for ~~4.5~~remediation action (the “Plan”) through and 13including the issuance of the Maryland Department of the Environment’s (“MDE”) Voluntary Cleanup Program “(VCP”) Certificate of Completion and any other applicable governmental closure documents (the “Environmental Services Agreement”).4 The Partnership is a third party beneficiary of the ~~Sale~~Environmental Services Agreement and, despite having a contractual right of indemnity from the Purchaser, has right to assume control of any and all remaining portions of the environmental work, in the event that the Purchaser defaults on their obligation to perform environmental investigations, remediation, and other legally required work. Under Maryland law, despite the indemnification from the Purchaser, the Partnership remains liable for some or all of the environmental issues. The Partnership has obtained an environmental insurance policy regarding the property and has added the Purchaser as an additional insured under the policy.

InWhile ~~light~~the ofPurchaser has agreed to indemnify the ~~termination~~Partnership offor certain named matters within the Sale Agreement, the potential for additional contingent expenses and ~~other~~liabilities ~~information,~~exist. The Partnership will be unable to provide the ~~managing~~total ~~general~~initial ~~partner~~distribution ofamount per unit until the Partnership ~~believes~~has ~~that~~completed ~~the~~a final audit of ~~Partnership’s~~its ~~liquidation~~books ~~will~~and ~~not~~records beand ~~completed~~makes byreasonable ~~December~~provision ~~31,~~for ~~2005~~all remaining outstanding and potential claims and contingencies. The ~~managing~~Partnership ~~general~~will ~~partner~~establish isa reserve, which it presently expects to be in the ~~process~~form of ~~analyzing~~a ~~the~~liquidating ~~current~~trust, ~~facts~~to address these contingent liabilities and ~~circumstances~~potential toclaims. ~~ascertain~~It ~~its~~is ~~best~~anticipated ~~estimate~~that ofthis ~~the~~reserve ~~Partnership’s~~will ~~liquidation~~be ~~date~~needed ~~and future~~for ~~liquidating~~approximately ~~costs~~two to three years. ~~The~~Depending ~~managing~~on ~~general~~the ~~partner~~outcome ~~expects~~of tosuch ~~announce~~potential ~~its~~claims ~~best~~and ~~estimate~~contingencies, ~~for~~there amay ~~liquidation~~be ~~date~~another ~~and~~distribution in the future ~~liquidating~~but ~~costs~~there ~~prior~~is tono ~~December~~assurance ~~31,~~that ~~2005~~this will occur. All distributions will be determined in accordance with the Partnership Agreement.

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~~costs of ~~property~~potential claims and contingencies. 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~~and ordistribution ~~achievements~~ of the Partnership to be materially different from any future results, net value per unit, ~~performance,~~and ordistributions ~~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 and the cost of claims and 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)		~~PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2 (Registrant)~~
Date: November 21, 2005			By:	Prudential-Bache Properties, Inc., a Delaware Corporation, managing general partner
Date: May 31, 2007	By:	Prudential-Bache Properties, Inc., a Delaware Corporation, managing general partner
	By:	/s/ RICHARD F. WELCH	~~By:~~	~~/s/ Warren S. Hoffman~~
				Warren S. Hoffman Chief Financial Officer and Vice President
		Richard F. Welch Chairman of the Board of Directors, President and Chief Executive Officer

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