In a small saucepan over low heat, combine the frozen pearl onions, chicken broth, sherry, bay leaf and thyme leaves. Bring to a low simmer and allow onions to thaw, approximately 5-6 minutes. Stir occasionally.
In a small bowl, whisk together the heavy and cream and flour. Combine with the onions mixture, stirring until no streaks are left.
Continue to simmer on low heat for 3-4 minutes.
Remove from the heat and stir in the salt and pepper. Remove and discard the bay leaf.
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