She was indignant that her son had been treated terribly.

Literal

She [topic-は] son [subject-が] terrible treatment [object-を] received [quotative-と] was-indignant.

憤慨する ('be indignant, be incensed, resent') is a strong, formal verb for righteous anger — the kind reserved for injustice or moral wrong, not everyday irritation. 扱いを受ける ('receive treatment') is the standard frame for the recipient end of how-you're-treated; ひどい扱い ('terrible / harsh treatment') is the bad-treatment collocation. と here marks the content of indignation. Past resultative 憤慨していた describes the sustained state of indignation.