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                                                                     EXHIBIT 3.1

                              SUNTERRA CORPORATION

                             ARTICLES OF RESTATEMENT



        SUNTERRA CORPORATION, a Maryland corporation (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland (the
"Department") that:

        FIRST: The Corporation desires to, and does hereby, restate its Charter
as currently in effect.

        SECOND: The following provisions are all of the provisions of the
Charter currently in effect:

        FIRST: The undersigned, Charles R. Moran, whose address is 300 East
        Lombard Street, Baltimore, Maryland 21202, being at least eighteen years
        of age, acting as incorporator, does hereby form a corporation under the
        General Laws of the State of Maryland.

        SECOND: The name of the corporation (which is hereinafter called the
        "Corporation") is:

                              Sunterra Corporation

        THIRD: The purposes for which and any of which the Corporation is formed
        and the business and objects to be carried on and promoted by it are:

               (1) To engage in the business of developing and operating
               timeshare resorts and to perform any and all activities necessary
               or desirable in connection therewith.

               (2) To engage in and perform any other activities or functions
               which may lawfully be performed by a business corporation
               organized under the General Laws of the State of Maryland.

        The foregoing enumerated purposes and objects shall be in no way limited
        or restricted by reference to, or inference from, the terms of any other
        clause of this or any other Article of the Charter of the Corporation,
        and each shall be regarded as independent; and they are intended to be
        and shall be construed as powers as well as purposes and objects of the
        Corporation and shall be in addition to and not in limitation of the
        general powers of corporations under the General Laws of the State of
        Maryland.


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        FOURTH: The present address of the principal office of the Corporation
        in the State of Maryland is c/o National Registered Agents, Inc. of MD,
        11 East Chase Street, Baltimore, Maryland 21202.

        FIFTH: The name and address of the resident agent of the Corporation is
        c/o National Registered Agents, Inc. of MD, 11 East Chase Street,
        Baltimore, Maryland 21202. Said resident agent is a Maryland
        corporation.

        SIXTH: The total number of shares of stock of all classes which the
        Corporation has authority to issue is One Hundred Twenty Five Million
        (125,000,000) shares consisting of One Hundred Million (100,000,000)
        shares of common stock, par value of One Cent ($.01) per share ("Common
        Stock") and Twenty Five Million (25,000,000) shares of preferred stock,
        par value of One Cent ($.01) per share ("Preferred Stock"). The
        aggregate par value of all of the Corporation's authorized shares of
        capital stock is One Million Two Hundred Fifty Thousand Dollars
        ($1,250,000).

        The designations and the preferences, conversion and other rights,
        voting powers, restrictions, limitations as to dividends, qualifications
        and terms and conditions of redemption of the shares of each class of
        capital stock of the Corporation are as follows:

               (1) Preferred Stock. The Preferred Stock may be authorized for
               issuance from time to time by the Board of Directors in one or
               more separately designated classes or series. The designation of
               each such class or series, the number of shares to be included in
               each such class or series, and the preferences, conversion and
               other rights, voting powers, restrictions, limitations as to
               dividends and terms and conditions of redemption shall be as set
               forth in resolutions adopted by the Board of Directors and
               included in Articles Supplementary filed as required by law from
               time to time prior to the issuance of any shares of such class or
               series. Subject to the express limitations, if any, of any class
               or series of Preferred Stock of which shares are outstanding at
               the time, the Board of Directors is authorized, by the adoption
               of resolutions, to increase or decrease (but not below the number
               of shares of Preferred Stock of such class or series then
               outstanding) the number of shares of Preferred Stock of such
               class or series and to alter the designation of or, classify or
               reclassify, any unissued shares of Preferred Stock of any class
               or


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               series from time to time, by setting or changing the preferences,
               conversion or other rights, voting powers, restrictions,
               limitations as to dividends or other distributions,
               qualifications or terms and conditions of redemption of such
               class or series.

               (2) Common Stock. Subject to all rights of Preferred Stock, as
               expressly provided herein, by law or by the Board of Directors
               pursuant to this Article Sixth, the Common Stock of the
               Corporation shall have all rights and privileges afforded to
               capital stock by applicable law in the absence of any express
               grant of rights or privileges in the Corporation's charter,
               including, but not limited to, the following rights and
               privileges:

                               (a) The holders of shares of Common Stock shall
                               have the right to vote for the election of
                               directors and on all other matters requiring
                               stockholder action, each share of Common Stock
                               being entitled to one vote;

                               (b) Dividends may be declared and paid or set
                               apart for payment upon shares of Common Stock out
                               of any assets or funds of the Corporation legally
                               available for the payment of dividends;

                               (c) Upon the voluntary or involuntary
                               liquidation, dissolution or winding-up of the
                               Corporation, the net assets of the Corporation
                               shall be distributed pro rata to the holders of
                               shares of Common Stock in accordance with their
                               respective rights and interests.

               SEVENTH: The business and affairs of the Corporation shall be
               managed by a Board of Directors which may exercise all of the
               powers of the Corporation except those conferred on, or reserved
               to, the stockholders by law. The number of directors of the
               Corporation initially shall be three (3), which number may be
               increased or decreased pursuant to the Bylaws of the Corporation
               but in no event shall be less than the minimum number required by
               the General Laws of the State of Maryland. Each director shall
               hold office until the next annual meeting of the stockholders of
               the Corporation and until his or her successor shall have been
               elected and qualified.


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                The following provisions shall apply to the directors of the
                Corporation: 

                        (a) The directors of the Corporation (other than any
                        directors who may be elected solely by holders of any
                        class or series of Preferred Stock) shall be and hereby
                        are divided into three classes, designated "Class I,"
                        "Class I" and "Class III," respectively. The number of
                        directors in each class shall be as nearly equal as
                        possible. Each director shall serve for a term ending on
                        the date of the third Annual Meeting of Stockholders
                        following the Annual Meeting at which such director was
                        elected, provided, however, that each initial director
                        in Class I, as determined by the directors, shall serve
                        for a term ending on the date of the Annual Meeting held
                        in 1997, each initial director in Class II, as
                        determined by the directors, shall serve for a term
                        ending on the date of the Annual Meeting held in 1998,
                        and each initial director in Class III, as determined by
                        the directors, shall serve for a term ending on the date
                        of the Annual Meeting held in 1999.

                        (b) In the event of any increase or decrease in the
                        authorized number of directors: (i) each director then
                        serving shall nevertheless continue as director of the
                        class of which such director is a member until the
                        expiration of such director's term or such director's
                        prior death, retirement, resignation or removal; and
                        (ii) except to the extent that an increase or decrease
                        in the authorized number of directors occurs in
                        connection with the rights of holders of Preferred Stock
                        to elect additional directors, the newly created or
                        eliminated directorships resulting from any increase or
                        decrease shall be apportioned by the Board of Directors
                        among the three classes so as to keep the number of
                        directors in each class as nearly equal as possible.

                        (c) Anything in this Article SEVENTH to the contrary
                        notwithstanding, each director shall serve until such
                        director's successor is elected and qualified, or until
                        such director's earlier death, retirement, resignation
                        or removal.

                        (d) A director may be removed from office with or
                        without cause only by the affirmative vote of the
                        holders of at least two-thirds of the votes entitled to
                        be cast in the election of directors.

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                EIGHTH: The following provisions are hereby adopted for the
                purposes of defining, limiting and regulating the powers of the
                Corporation and of the directors and stockholders:

                        (1) The Board of Directors shall have power from time to
                        time and in its sole discretion (a) to determine in
                        accordance with sound accounting practice what
                        constitutes annual or other net profits, earnings,
                        surplus or net assets in excess of capital; (b) to fix
                        and vary from time to time the amount to be reserved as
                        working capital, or determine that retained earnings or
                        surplus shall remain in the hands of the Corporation;
                        (c) to set apart out of any funds of the Corporation
                        such reserve or reserves in such amount or amounts and
                        for such proper purposes as it shall determine and to
                        abolish or redesignate any such reserve or any part
                        thereof; (d) to borrow or raise money upon any terms for
                        any corporate purposes; (e) to distribute and pay
                        distributions or dividends in stock, cash or other
                        securities or property, out of surplus or any other
                        funds or amounts legally available there for, at such
                        times and to the stockholders of record on such dates as
                        it may, from time to time, determine; and (f) to
                        determine whether and to what extent and at what times
                        and places and under what conditions and regulations the
                        books, accounts and documents of the Corporation, or any
                        of them shall be open to the inspection of stockholders,
                        except as otherwise provided by statute or by the Bylaws
                        of the Corporation, and, except as so provided, no
                        stockholder shall have the right to inspect any book,
                        account or document of the Corporation unless authorized
                        so to do by resolution of the Board of Directors.

                        (2) The liability of the directors and officers of the
                        Corporation to the Corporation or its stockholders for
                        money damages shall be limited to the fullest extent
                        permitted under the General Laws of the State of
                        Maryland now or hereafter in force, including, but not
                        limited to, Section 5-349 of the Courts and Judicial
                        Proceedings Article of the Annotated Code of Maryland,
                        or any successor provision of law of similar import, and
                        the directors and officers of the Corporation shall have
                        no liability whatsoever to the Corporation or its
                        stockholders for money damages

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                        except to the extent which such liability can not be
                        limited or restricted under the General Laws of the
                        State of Maryland now or hereafter in force. Neither the
                        amendment nor repeal of the foregoing sentence of this
                        Section (2) of Article EIGHTH nor the adoption nor
                        amendment of any other provision of the Charter or
                        Bylaws of the Corporation inconsistent with the
                        foregoing sentence shall apply to or affect in any
                        manner the applicability of the foregoing sentence with
                        respect to any act or omission of any director or
                        officer occurring prior to any such amendment, repeal or
                        adoption.

                        (3) The Corporation shall indemnify, in the manner and
                        to the fullest extent permitted by law, any person who
                        is or was a party to, or is threatened to be made a
                        party to, any threatened, pending or completed action,
                        suit or proceeding, whether or not by or in the right of
                        the Corporation and whether civil, criminal,
                        administrative, investigative or otherwise, by reason of
                        the fact that such person is or was a director or
                        officer of the Corporation, or that such person, while
                        an officer or director of the Corporation, is or was
                        serving at the request of the Corporation as a director,
                        officer, partner or trustee of another corporation,
                        partnership, trust, employee benefit plan or other
                        enterprise. To the fullest extent permitted by law, the
                        indemnification provided herein shall include expenses
                        (including attorneys' fees), judgments, fines and
                        amounts paid in settlement and any such expenses may be
                        paid by the Corporation in advance of the final
                        disposition of any such action, suit or proceeding. Upon
                        authorization by the Board of Directors, the Corporation
                        may indemnify employees and/or agents of the Corporation
                        to the same extent provided herein for directors and
                        officers. Any repeal or modification of any of the
                        foregoing sentences of this Section (3) of Article
                        EIGHTH shall be prospective in operation and effect
                        only, and shall not adversely affect any right to
                        indemnification or advancement of expenses hereunder
                        existing at the time of any such repeal or modification.

                        (4) No holders of shares of stock of the Corporation of
                        any class shall have any preemptive rights or
                        preferential right to purchase, subscribe for or
                        otherwise acquire any shares of

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                        stock of the Corporation of any class now or hereafter
                        authorized or any securities convertible into or
                        exchangeable for shares of stock of the Corporation of
                        any class now or hereafter authorized or any warrants,
                        options or other instruments evidencing rights to
                        purchase, subscribe for or otherwise acquire shares of
                        stock of the Corporation of any class now or hereafter
                        authorized, other than such preferential rights, if any,
                        as the Board of Directors in its sole discretion may
                        determine, and at such price as the Board of Directors
                        in its sole discretion may fix.

                        (5) The Board of Directors shall have the power, in its
                        sole discretion and without limitation, to authorize the
                        issuance at any time and from time to time of shares of
                        stock of the Corporation, with or without par value, of
                        any class now or hereafter authorized and of securities
                        convertible into or exchangeable for shares of the stock
                        of the Corporation, with or without par value, of any
                        class now or hereafter authorized, for such
                        consideration (irrespective of the value or amount of
                        such consideration) and in such manner and by such means
                        as said Board of Directors may deem advisable.

                        (6) The Board of Directors shall have the power, in its
                        sole discretion and without limitation, to classify or
                        reclassify any unissued shares of stock, whether now or
                        hereafter authorized, by setting, altering or
                        eliminating in any one or more respects, from time to
                        time before the issuance of such shares, any feature of
                        such shares, including but not limited to the
                        designation, preferences, conversion or other rights,
                        voting powers, qualifications, and terms and conditions
                        of redemption of, and limitations as to dividends and
                        any restrictions on, such shares.

                        (7) The Corporation reserves the right at any time and
                        from time to time to make any amendments to its Charter
                        including any amendments changing the terms of contract
                        rights, as expressly set forth in its Charter, of any of
                        its outstanding stock by classification,
                        reclassification or otherwise; and all contract or other
                        rights, preferences and privileges of whatsoever nature
                        conferred upon stockholders, directors and

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                        officers by and pursuant to the Charter of the
                        Corporation are granted subject to this reservation.

                        (8) Notwithstanding any provision of law requiring a
                        greater proportion of the votes of all classes of stock
                        of the Corporation for approval of dissolution of the
                        Corporation, the affirmative vote of a majority of all
                        votes entitled to be cast by the stockholders of the
                        Corporation shall be sufficient, valid and effective,
                        after due authorization, approval or advice by the Board
                        of Directors, to approve and authorize dissolution of
                        the Corporation.

               The enumeration and definition of particular powers of the Board
               of Directors included in the foregoing shall in no way be limited
               or restricted by reference to or inference from the terms of any
               other clause of this or any other Article of the Charter of the
               Corporation, or construed as or deemed by inference or otherwise
               in any manner to exclude or limit any powers conferred upon the
               Board of Directors under the General Laws of the State of
               Maryland now or hereafter in force.

        THIRD: The foregoing restatement of the Charter has been approved by a
majority of the entire board of directors of the Corporation.

        FOURTH: The Charter is not amended by these Articles of Restatement.

        FIFTH: The current address of the principal office of the Corporation is
set forth in Article FOURTH of the foregoing restatement of the Charter.

        SIXTH: The name and address of the Corporation's current resident agent
is set forth in Article FIFTH of the foregoing restatement of the Charter.

        SEVENTH: The number of directors of the Corporation is currently ten
(10) and the names of those currently in office are as follows:\

                                  Adam A. Aron
                               Stanford R. Climan
                               J. Taylor Crandall
                               Michael A. Depatie
                               Joshua S. Friedman
                                Andrew J. Gessow
                                  Osamu Kaneko
                                W. Leo Kelly, III
                               Steven C. Kenninger
                                 James E. Noyes


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        IN WITNESS WHEREOF, the Corporation has caused these Articles of
Restatement to be signed in its name and on its behalf by its President and its
corporate seal to be hereunder affixed and attested by its Secretary on this 1st
day of July, 1998, and its President acknowledges that these Articles of
Restatement are the act and deed of the Corporation and, under the penalties of
perjury, that the matters and facts set forth herein with respect to
authorization and approval are true in all material respects to the best of his
knowledge, information and belief.

ATTEST:                                 SUNTERRA CORPORATION

/s/ ANDREW D. HUTTON                    /s/ STEVEN C. KENNINGER
------------------------------          -----------------------------------
Andrew D. Hutton                        (SEAL)
Secretary                               Steven C. Kenninger
                                        President