I suggest you tell them the truth and be prepared to find somewhere else to live. Whilst you were not directly involved in sexually harassing K, you let it happen and her parents (let alone K) will likely not trust you again for a long time. K will need counselling as she has been seriously traumatised - she’s been sexually harassed in her own home by friends of someone she trusted whilst that person did nothing to stop them. A key place and person she thought were safe have been shown not to be. That’s not going to heal quickly, nor without help.

If you want to try to rebuild the relationship in any way, you’re going to need to do a lot of work and it’s going to take a lot of time. An apology - to her and her parents - is just the first step. You’re also going to need to show that you are not the same as your schoolmates who sexually harassed her. If I were K’s parents, I’d expect you to report those schoolmates to the police and cut ties with them at minimum.