Kathy was kidnapped by Peggy Mitchell and cyrogenically frozen for many years until Phil discovered her in a glass coffin in Ibeefa. When Prince Philth kissed her she miraculously came back to life and now her life's ambition is to come back to Walford and run the Café.
Turns out Kathy had actually been in prison in South Africa for stopping her car at the side of the road and rubbing her partners stomach (must have had trapped wind), it's an offence in some countries y'know.