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JP and Craig were having problems so enlisted a friend to be a surrogate mother (because it's always a good idea to have a kid to fix a relationship...). I think that both men "donated" to the venture, so we're not sure who the biological father actually is.
JP and Craig then split up, Craig disappeared and JP went home to the McQueens. Baby turned up on Christmas day, abandoned by the surrogate mother who had been left with the baby with the men split up.