Since you can make this in a braising pan as well, I'm submitting it to the November Tasty Tools at Joelen's Culinary Adventures.
(adapted from A New Way to Cook by Sally Schneider)
8 ounces button mushrooms, quartered
1 small shallot, finely chopped
1 small garlic clove, crushed and chopped
1 sprig fresh thyme
2 tbsp dry white wine
1 tsp olive oil
1/8 tsp salt
20 pearl onions, peeled
2 thick slices bacon, diced
3 tbsp flour
1 3-lb chicken, skinned and cut into 8 pieces
1 tsp salt
1 tsp black pepper
1/2 cup port
1 1/2 cups dry red wine
To make the mushrooms:
Heat the oil in a skillet until hot. Add the mushrooms, shallot, garlic, and thyme, and saute for about 3 minutes. Turn the heat down to medium-low, add the wine, salt, and pepper, and cook, stirring occasionally, for about 10 or 15 minutes.
To make the chicken:
Cook the bacon in a small skillet over low heat, for about 8 minutes. Remove with a slotted spoon and drain on paper towels. Reserve the bacon grease.
Sprinkle the chicken pieces with salt and pepper
Spread the flour on a plate and dip each piece of chicken in it, shaking off any excess.
Heat the bacon grease over medium-high in a dutch oven or other large, heavy pan. Saute the chicken in batches until golden, about 3 minutes on each side. Transfer to a platter.
Add the port and wine and cook for about 10 minutes, until reduced slightly.
Turn the heat to medium-low.
Stir in the bacon and pearl onions and add a few pinches of salt.
Add the chicken pieces and cook, partially covered, for 20-30 minutes.
Remove the chicken pieces to a serving dish and keep warm. Simmer the sauce until thickened slightly, about 10 minutes. Add the mushrooms during the last 3 minutes. Taste and adjust seasonings as necessary.
Pour the sauce over the chicken and serve.