In a chafing dish, melt butter; add mushrooms and stir over medium heat until mushrooms are golden. Pour in the 3/4 cup water, sprinkle in beef stock or bouillon cube, and stir to dissolve. Then add wine, catsup, bay leaf, onions, and garlic. Slowly blend 1/4 cup cold water into cornstarch; gradually stir into pan. Cook, stirring, until mixture boils and thickens. Cover and chill if made ahead.
To serve, prepare enough rice for 4 servings according to package directions. Bake meatballs as directed. Reheat sauce in chafing dish, add meatballs, and heat thoroughly, stirring often. Arrange the rice on a heated serving platter or place in a bowl. Bring to the table with the meatballs and sauce, placing the chafing dish over a low flame or use the bain-marie to prevent scorching. Makes 4 servings.