1. Combine first 3 ingredients and 1/4 teaspoon salt in a shallow dish. Dredge chicken in flour mixture. Cook bacon in a large skillet over medium heat until crisp. Remove bacon from pan; crumble. Add chicken to drippings in pan; cook 4 minutes on each side or until browned. Remove chicken from pan.
2. Add onion, squash, and mushrooms to pan; cook for 5 minutes, stirring frequently. Add apple and garlic; cook 1 minute. Stir in sherry; cook 1 minute or until liquid evaporates. Add chard; cook 2 minutes or until wilted, stirring constantly. Add cherry pepper; cook 30 seconds. Return chicken to pan; add broth. Bring mixture to a boil. Cover, reduce heat, and simmer 15 minutes or until a thermometer inserted into thickest part of chicken thigh registers 165°. Stir in remaining 1/4 teaspoon salt. Sprinkle with crumbled bacon.
Wine note: A supple red, like merlot, is a good choice for this recipe. While we normally think of white wine with chicken, this dish's smoky bacon and earthy mushrooms, along with braising, give it the rich flavors to match red. A basic Blackstone Merlot ($12), with plummy fruit, a medium body, and very soft tannins, won't overpower the dish or clash with the sweet heat of cherry peppers. —Jeffery Lindenmuth