Heat a deep pot over medium to medium high heat. Work next to the stove to slice onions. Add oil and butter to the pot. Add onions to the pot as you slice them. When all the onions are in the pot, season with salt and pepper and 1 teaspoon fresh thyme. Cook onions 15 to 18 minutes, stirring frequently, until tender, sweet and caramel colored. Add bay leaf and sherry to the pot and deglaze the pan drippings. Add 6 cups stock and cover pot to bring soup up to a quick boil.
Arrange 4 small, deep soup bowls or crocks on a cookie sheet. Preheat broiler to high. Once soup reaches a boil, ladle it into bowls. Float toasted crusty bread on soup and cover each bowl with a mound of cheese. Sprinkle remaining fresh thyme on cheese and place cookie sheet with soup bowls on it under hot broiler until cheese melts and bubbles.
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