Step 1

Preparation Preheat oven to 325°F. Sauté bacon in heavy large Dutch oven over high heat until brown and crisp, about 8 minutes. Using slotted spoon, transfer bacon to paper towels. Season beef generously with salt and pepper; coat with 1/3 cup flour, using all of flour. Working in 3 batches, brown beef in same pot over high heat, about 5 minutes per batch. Transfer meat to large bowl. Add onions and carrots to same pot and sauté until light brown, about 6 minutes. Add garlic and sauté 1 minute. Transfer vegetables to bowl with beef.

Step 2

Add 1 cup broth and Cognac to pot; boil until reduced to glaze, scraping up browned bits, about 8 minutes. Return meat and vegetables and their juices to pot. Add wine, mushrooms, thyme, sugar, tomato paste and 2 cups broth. Bring to boil, stirring occasionally. Cover pot and place in oven. Cook until beef is tender, about 1 hour 20 minutes.

Step 3

Ladle liquid from stew into large saucepan. Spoon off fat. Boil liquid until reduced to 2 3/4 cups, about 40 minutes. Season with salt and pepper. Pour liquid back over beef and vegetables. (Can be prepared 1 day ahead. Cover and chill.) Rewarm over low heat before serving.