There's not really enough context for a translation of the whole sentence, but I would do the following with the verb in question...
Kato and I slowly walked toward the station.
Kato and I leisurely made our way to the station.
I would choose "walked" or "made our way" in the past tense because it's clear from the context that this is a narrative about something that has already happened.
I guess you could go with...
Kato and I were slowly walking to the station.
...if you wanted to emphasize that part.
I guess what I'm getting at is that the fact that 歩く isn't 歩いている doesn't in any way rule out the idea that it's a progressive action taking place in the past. The verb 歩く in this context already gives that information, so if the author had chosen to write...
... then the basic meaning would not change and there wouldn't be any grammatical problems, but it would seem like he was emphasizing the "we were walking" part for some reason.