Five hundred years ago, the Shredder was a madman who wore the mystic Kuroi Yoroi armor, which "swallowed [his] soul." He terrorized Japan with the Foot Clan until he was defeated by Splinter's ancestors, who dedicated themselves to making sure the armor never fell into the Foot Clan's hands again.
His exact fate is unknown. Splinter only speaks of him being "defeated" and "banished," and indicates that the reassembly of the Kuroi Yoroi will result in his return.
In "Shadow of Evil," it is revealed that the Foot Lieutenant and the Foot Brute have enlisted Baron Draxum to find the pieces of the Kuroi Yoroi. As a part of the chest piece was placed with the armor, a brief glimpse of the Shredder's face was seen.