In a large saucepan, combine the chicken, 1/2 cup diced onions, garlic, and bay leaves. Cover with water.
Simmer for 1 hour or until the chicken is tender and pulls apart. Remove the chicken and shred into bite size pieces.
Meanwhile, sauté the remaining 1 cup of diced onions and brown sugar in oil until golden brown (about 10 minutes).
Add the tomatoes with juice, salt, pepper, and hot sauce. Simmer over low heat until the sauce starts to thicken (about 10 minutes).
Transfer to a food processer and blend until smooth. Pour over the chicken and mix.