Heat the skillet over medium heat and, when hot, add the sausage. Cook until sausage begins to brown, breaking it into small pieces with a wooden spoon, about 4 minutes. Add 1/2 the shallots to the skillet and continue to cook until meat is golden brown and the shallots are soft, about two minutes longer. Remove the skillet from the heat and set aside.
Repeat above steps for bacon.
Butter a 11x13 inch baking dish and line the bottom with the bread slices. Top the bread slices with the sausage-shallot, bacon-shallot mixture and grated cheese.
In a mixing bowl, combine the eggs, half-and-half, salt and pepper, and whisk to combine. Pour the egg mixture evenly over the layered bread mixture. Cover with foil and refrigerate for at least one hour and up to overnight.
Remove the casserole from the refrigerator and allow to come to room temperature for about 20 minutes. Position rack in center of oven and preheat the oven to 325F.
Bake the casserole covered, for about an hour. Remove foil, set oven to 375F, top with chives and cooked for an additional 15 minutes or until puffed and golden brown. Using oven mitts or pot holders, remove the casserole from the oven and let rest for five minutes before serving.
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