I agree with bc that Minnie was scared by the towel especially if he tried to wrap her in it maybe. Its somethoing you can do prpbably with a dog but have to be more sensitive with a cat. She will now associate him with something scary and if he is angry at her then she will sense this too, even if he doesnt show it.
Does she like any nice treats or special food cos I think he will have to bribe her back and try to get her to overcome her fear with some hand feeding.
This if it works will allow her to understand he will not hurt her and also the same for him.
It does worry me a bit about what he has said about moving, because cats can get so easily distressed and will be angry if they are scared and any cat person should not be put off because of an isolated accident. Maybe he was angry at the time, or not serious, but if he is serious , that would worry me a lot.