Some TMNT stuff really isn't for little kids.
The Penguin had met and struck a deal with the Shredder, who offered a large sum of money in exchange for a resonance engine. However, it was soon revealed that Shredder had no intention of paying them, and his Foot Clan ninjas soon dispatched the Penguin's mercenary followers.
Though Shredder was inclined to kill the Penguin, the businessman managed to survive by making his resources available to Shredder. His hope was initially that Shredder would complete the portal and leave that dimension forever, but he was dismayed when he discovered that Shredder intended to use the portal to rule both his own New York and Gotham.
Desperate to stop the impending destruction of Gotham, he went to Jim Gordon, and appealed to Batman to do something. He warned Batman and the Turtles of Ra's al Ghul's new partnership with the Shredder.
However, Shredder soon became aware of the Penguin's betrayal. As punishment, he became the first of several villains to be mutated into an animal form, specifically that of a penguin. He joined the other villains in Arkham in assaulting Batman, but was soundly defeated by the Ninja Turtles.
It was predicted that in a week's time, he would revert to his normal state.