From: Rabbi Moshe Sofer
To: Unknown recipient
The Chasam Sofer distinguishes two scenarios: if the ink was originally valid black ink and turned reddish through natural aging, the Sefer Torah remains valid and the letters may be retraced without concern for kesidran or erasure of Holy Names. However, if the ink turned red abnormally or immediately, indicating a defective composition from the outset, the Sefer Torah was never valid and cannot be remedied, since no valid writing ever existed and retracing the Holy Names would constitute forbidden erasure.
Source: Shu"t Chasam Sofer YD §256