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In a large skillet, cook bacon over medium heat until crisp. Remove to paper towels with a slotted spoon; drain, reserving 2 tablespoons drippings.
Sprinkle chicken with salt and pepper; brown in drippings. Remove and keep warm. Add shallots; cook and stir until tender. Stir in water and garlic. Return chicken to pan. Bring to a boil. Reduce heat; cover and simmer for 30-35 minutes or until a thermometer inserted in thigh reads 170°-175°.
Remove chicken to a serving platter; keep warm. Skim fat from cooking juices. Mash garlic; add vinegar. Bring liquid to a boil; cook until slightly thickened. Spoon over chicken; sprinkle with reserved bacon.Yield: 4 servings.