Hi On Behalf,
You didn't say what the traumatic event was that prevented them from finishing or whether it was likely to be a factor in the fear of flying? I'm guessing so.
Your friend may just need some time to "rebalance" away from aviation. If this is the case, try not to push them, if they really love flying they'll come back to it of their own accord.
If they want to get back in sooner, although this sounds deep end I would recommend a course of learning to recover from unusual attitides or aerobatics. Learning to recover from unusual attitudes gives you the confidence that you can handle emergency situations without "losing it". They will need to find a very good instructor and explain the problem to them, and they will also have to accept that there will be good days and bad days.
Good luck