Season chicken with salt and black pepper.
Heat olive oil in a Dutch oven over medium heat.
Add bacon and cook until crispy, then remove and set aside.
Brown chicken pieces on all sides and remove from pot.
Add pearl onions and mushrooms and sauté until lightly browned.
Stir in garlic and tomato paste and cook for 30 seconds.
Pour in red wine and scrape the bottom to deglaze the pot.
Add chicken broth, thyme, bay leaf, bacon, and chicken back to the pot.
Bring to a gentle simmer, cover, and cook for 1 hour.
Remove lid and simmer uncovered until sauce thickens slightly.
Taste, adjust seasoning, and garnish with fresh parsley before serving.