Be honest in your response. Instead of harping on the negative, focus on the positive aspects of how you turned the situation around and what you learned along the way. You should give an example that demonstrates your ability to recover when things go wrong

"In my final semester of undergraduate studies, we had a group project that took approximately eight weeks. Around week four, we realized that one of the group members was not pulling her weight. The work she agreed to do was not getting done. I took charge of the situation and scheduled a group meeting with our team to discuss the issue. Ultimately, that person dropped the course, but by addressing the problem head-on, the group was able to divide up our work and complete the project on time. In the future, I would make sure that the group has weekly meetings to assess our progress. That would make sure the project was on track and that the work was getting done."