Wash chicken. On a flat dish, combine flour, salt and pepper. Roll chicken in flour mixture, coating evenly. In a 5 quart Dutch oven, slowly heat the oil and butter. Add chicken pieces in a single layer; sauté on all sides, turning to brown, about 10 min. Remove chicken as it browns, continue with all of the chicken and set aside. Add the garlic, thyme, basil, and parsley to Dutch oven. Sauté herbs, stirring, over medium heat 5 min. Add the tomatoes, tomato paste, sugar and ¾ cup of the wine. Stir to mix well. Place chicken in sauce. Bring to boiling; reduce heat; simmer, covered, 40 min. Add the sliced mushrooms to chicken; cook, covered 10 min more.
To serve arrange chicken on a platter with sauce and sprinkle with parsley.