First you have a redemption. Yes the S Corp can buy back its stock. Whether Treasury stock is allowed is a matter of state law.

It appears that simultaneously the S Corp sold the stock it just bought to a new owner. New owner's basis is what they paid for the stock.

Who is the "lender" on the loan? S Corp or new owner? If S Corp, new owner does not get debt basis.

New owner will probably have a hard time selling with that loan on the books. It will probably have to be paid off as a condition of sale.