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My understanding is this:
As soon as there's more than one NPC sorority at a school, they must form a campus Panhellenic. Members of whichever sorority was there first (AST in this case) should take the lead in setting it up. Panhel oversees formal recruitment among other things.
Locals are under no obligation to join Panhel or participate in formal recruitment. In fact, locals cannot be full members of Panhel. Instead, they can have associate membership, which entitles them to hold minor offices and to vote on certain issues.
Panhel can coexist with the existing IFPC. The NPC sororities would be members of both IFPC and Panhel.
So probably the best solution, assuming Kappa becomes a chapter of an NPC sorority, is to form a Panhel with AST and Kappa, and offer associate membership to Theta. Theta can then join Panhel and participate in formal rush, or not, as they choose.
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