Katherine Shane (Born Woodhouse), was the product of a one-night stand between a dark wizard and another woman. The Dark Wizard, Kedric Woodhouse kept digging himself into a deeper and deeper hole. When Katherine was dropped off at his doorstep, it was too late. Kedric was on the road to Azkaban, and to Azkaban he went. Katherine was three months old.
Since the Ministry couldn't find the other woman, Katherine was sent to St. Mungo's. Kedric was initially sentenced to two years in prison, but he got out a year early for good behavior. When Kedric was released from Azkaban, he went to Lil Bundles immediately. However the owner wasn't comfortable with having an ex-con just turn up and take his daughter. She wanted him to prove himself first, by offering him a job at Lil Bundles. It took time, but eventually Kedric took Katherine home with him.
Now this wasn't to say that Kedric became the perfect parent. Yes, his time in Azkaban changed him, but he still had a temper, and was still arrogant. Kedric tried to make his daughter tough, because he was all too well aware she was going to get scrutiny. He taught her to not show fear and sadness. It worked - somewhat anyway. It took a lot to scare Katherine, but sadness - well that didn't work out as well. Katherine would bottle it all up, and would break down in private.