Preheat oven to 350º F.
Add 2 Tablespoons vegetable oil to a heavy 12-inch skillet; heat over medium high heat. Add beef and toss until all pieces are seared. Reduce heat to medium; add chopped onion and carrots. Cook 5 minutes. Add flour, salt, pepper and thyme. Stir to coat meat mixture. Add beef gravy, wine, water and Madeira . Simmer 10 minutes to thicken the sauce. Pour into an oven proof casserole dish. Bake at 325º F for 1 hour or until meat is tender. Add potatoes and continue cooking 30 minutes longer.
Sauté mushrooms and pearl onions in 1 Tablespoon butter until tender, about 5 minutes. Add Cognac and ignite. Stir until flame dies out. Add to meat mixture and continue cooking at 325º F for 30 minutes longer. Remove from oven. Serve with crusty French bread, a tossed green salad and a bottle of red wine. Yield: 4 servings.